The Whitton Company Uses a Discount Rate of 15

question 114

Multiple Choice

The Whitton Company uses a discount rate of 15%.The company has an opportunity to buy a machine now for $16,000 that will yield cash inflows of $8,000 per year for each of the next three years.The machine would have no salvage value.What is the net present value of this machine,rounded to the nearest whole dollar,do not round your intermediate calculations? (Ignore income taxes in this problem.)

• A) ($9,980).
• B) $2,266.
• C) $12,000.
• D) $22,460.

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Definitions:

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Mary Ainsworth

An American-Canadian developmental psychologist known for her work on attachment theory.

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