Use the Table for the Question(s)below

question 93

Multiple Choice

Use the table for the question(s) below.

-You own a Canadian firm that invests in a U.S.project with the cash flows shown in the table above.Given a corporate tax rate of 40% and a WACC of 8.9%,what is the NPV of the investment?

• A)$9.3 million CAD
• B)$0.1 million CAD
• C)-$0.1 million CAD
• D)$7.5 million CAD
• E)$7.2 million CAD

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Definitions:

Percentile Rank

A score indicating the percentage of scores in a distribution that a particular score is equal to or higher than.

Cumulative Distribution

A method of converting a frequency distribution of scores into increasing percentages as a function of the percentage of scores counted. A bar graph is often generated by placing the class interval scores along the x-axis and the cumulative percentages along the y-axis.

Frequency Polygon

A method of converting a frequency distribution of scores into a line graph. After combining scores by class interval, the class intervals are placed along the x-axis and the frequency of scores along the y-axis.

Positively Skewed Curve

A set of test scores in which the majority fall at the lower or negative end. It is said to be a positively skewed curve or distribution because a few “positive” or high-end scores have stretched or skewed the curve to the right.