Use the Information Below to Answer the Following Questions -Refer to the Table Above

question 9

Multiple Choice

Use the information below to answer the following questions.
Han Ltd supplies chilli paste to large supermarket chains. The company is currently considering scrapping the old processor and investing in a new processor. Information about the investment is as follows: $$\begin{array} { l r } \text { Initial investment in processor } & \$ 105,000 \\\text { Operating cash flows over next 5 years: } & \\\quad \text { Cash receipts } & \$ 80,000 \\\quad \text { Cash payments } & \$ 40,000 \\\text { Residual value of processor in 5 years } & \$ 5,000 \\\text { Required rate of return } & 8 \% \\\text { Depreciation per antum } & \$ 20,000\end{array}$$
-Refer to the table above. The net present value (rounded) of the investment is:

• A)$68,125.
• B)$66,500.
• C)$67,000.
• D)$71,000.

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Definitions:

Accounting

The systematic process of recording, measuring, and communicating financial information about economic entities.