Use the Following Information to Answer the Question(s)below

question 38

Multiple Choice

Use the following information to answer the question(s) below.
Frank Dewey Esquire from the firm of Dewey,Cheatum,and Howe,has been offered an upfront retainer of $30,000 to provide legal services over the next 12 months to Taggart Transcontinental.In return for this upfront payment,Taggart Transcontinental would have access to 8 hours of legal services from Frank for each of the next 12 months.Frank's normal billable rate is $250 per hour for legal services.
-Assuming that Dewey's cost of capital is 12% EAR,then the NPV of his retainer offer is closest to:

• A)-$7500.
• B)-$7400.
• C)$6000.
• D)$7400.

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Definitions:

Survival of the Fittest

A concept in natural selection suggesting that individuals or species that are most adaptable to their environment have a better chance of surviving and reproducing.

Charles Darwin

A 19th-century English naturalist, geologist, and biologist best known for his contributions to the science of evolution by natural selection.

Species

A group of living organisms consisting of similar individuals capable of exchanging genes or interbreeding, forming the principal natural taxonomic unit below a genus.

William Graham Sumner

A prominent American sociologist and economist known for his contributions to social Darwinism and conflict theory.