Use the Information for the Question(s)below

question 59

Multiple Choice

Use the information for the question(s) below.
-The owner of a hair salon spends $1,000,000 to renovate its premises,estimating that this will increase her cash flow by $220,000 per year.She constructs the above graph,which shows the net present value (NPV) as a function of the discount rate.At what dollar value should the NPV profile cross the vertical axis?

• A)$780,000
• B)$1,000,000
• C)$220,000
• D)The vertical axis crossing point cannot be calculated since the cash inflows are a perpetuity.
• E)Cannot be determined because inadequate information is given.

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Definitions:

Pelvic Inflammatory Disease

An infection of the female reproductive organs often caused by sexually transmitted bacteria, leading to inflammation.

Infertility

is the inability to conceive a child after a year or more of regular sexual intercourse without the use of birth control.

Women

Female humans, considered both individually and collectively, often with respect to social, cultural, biological, and gender identity aspects.

Sexual Arousal

The physiological and psychological state of being stimulated or excited sexually.