Use the Information for the Question(s)below

question 50

Multiple Choice

Use the information for the question(s) below.
Boulderado has come up with a new composite snowboard.Development will take Boulderado four years and cost $250,000 per year,with the first of the four equal investments payable today upon acceptance of the project.Once in production the snowboard is expected to produce annual cash flows of $200,000 each year for 10 years.Boulderado's discount rate is 10%.
-The NPV profile graphs:

• A)the project's NPV over a range of discount rates.
• B)the project's IRR over a range of discount rates.
• C)the project's cash flows over a range of NPVs.
• D)the project's IRR over a range of NPVs.

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Definitions:

Opportunity Cost

Failing to capitalize on potential gains from other alternatives when making a singular choice.

Consumer Goods

Products and services that are consumed by individuals or households for personal satisfaction and daily use.

Capital Goods

Physical assets utilized by businesses to produce goods and services, such as buildings, machinery, and equipment.

Allocation of Resources

The process of distributing scarce resources among various uses or activities in a way that maximizes the achievement of objectives.