Use the Information for the Question(s)below

question 36

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 discount rate does her decision to renovate become untenable?

• A)3.0%
• B)3.3%
• C)4.0%
• D)4.8%
• E)5.0%

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