Nylan Manufacturing Is Considering Two Alternative Investment Proposals with the Following

question 24

Multiple Choice

Nylan Manufacturing is considering two alternative investment proposals with the following details: $$\begin{array} { | l | r | r | } \hline & \text { Proposal X } & \text { Proposal Y } \\\hline \text { Investment } & \$ 720,000 & \$ 500,000 \\\hline \text { Useful life } & 5 \text { years } & 4 \text { years } \\\hline \text { Estimated annual net cash inflows } & \$ 150,000 & \$ 90,000 \\\hline \text { Residual value } & \$ 50,000 & \$ 0 \\\hline \text { Depreciation method } & \text { Straight-line } & \text { Straight-line } \\\hline \text { Discount rate } & 10 \% & 9 \% \\\hline\end{array}$$ What is the total present value of future cash inflows from Proposal Y?
Present value of annuity of $1:
$$\begin{array} { | r | r | r | r | } \hline & 8 \% & 9 \% & 10 \% \\\hline 1 & 0.926 & \$ 0.92 & 0.909 \\\hline 2 & 1.783 & 1.759 & 1.736 \\\hline 3 & 2.577 & 2.531 & 2.487 \\\hline 4 & 3.312 & 3.24 & 3.17 \\\hline 5 & 3.993 & 3.89 & 3.791 \\\hline 6 & 4.623 & 4.486 & 4.355 \\\hline\end{array}$$

• A) $266,750
• B) $291,600
• C) $290,000
• D) $250,000

Discern the effect of value and quality mistakes on contract enforceability.

Comprehend the legal boundaries of exaggeration, seller’s talk, and their impact on fraud liability.

Recognize the implications of undue influence and duress on contractual consent.

Grasp the difference between mistakes of law and mistakes of fact in the context of contract formation and enforcement.

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Definitions:

Past Events

Occurrences or actions that have taken place before the present time.

Motivation

The internal or external drive that prompts individuals towards actions, goals, or to fulfill certain needs.

Free Will

The ability of individuals to make choices that are not predetermined by past events or natural laws.

Determinism

The philosophical doctrine that all events, including moral choices, are determined completely by previously existing causes.