Use the Table for the Question(s)below

question 77

Multiple Choice

Use the table for the question(s) below.
Consider a project with the following cash flows:

-Given the cash flows in the table above, the point at which the NPV profile crosses the vertical axis is

• A)-$612.
• B)22.0%.
• C)14.0%.
• D)$5 500.

Calculate economic order quantity (EOQ) for inventory management and understand its impact on costs.

Assess the financial implications of extending credit to new customers, including the potential for increased sales and risk of default.

Evaluate the benefits and risks of switching from a cash-only to a credit sales policy.

Understand the impact of trade credit terms on payment amounts and timing.

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Definitions:

Random Phenomenon

A random phenomenon is a natural or physical event that has an unpredictable outcome, with individual occurrences varying in a non-deterministic manner.

Probability

A numeric evaluation of the chance that an event will happen, specified as a number from 0 to 1.

Law of Large Numbers

A principle that states that as a sample size grows, its mean will get closer to the average of the whole population.

Probability Assignment Rule

A principle used to assign probabilities to outcomes of a random experiment, ensuring the probabilities are non-negative and sum to one.