Following Details Are Provided by VPN Company Refer to the Following Table for PV Factors

question 97

Multiple Choice

Following details are provided by VPN Company. $$\begin{array} { | c | r | } \hline \text { Initial investment } & \$ 5,000,000 \\\hline \text { Discount rate } & 15 \% \\\hline \text { Yearly cash flows } & \\\hline 1 & \$ 1,250,000 \\\hline 2 & \$ 1,350,000 \\\hline 3 & \$ 2,400,000 \\\hline 4 & \$ 1,150,000 \\\hline\end{array}$$ Refer to the following table for PV factors:
$$\begin{array} { | r | r | r | r | } \hline & 13 \% & 14 \% & 15 \% \\\hline 1 & 0.885 & 0.877 & 0.87 \\\hline 2 & 0.783 & 0.769 & 0.756 \\\hline 3 & 0.693 & 0.675 & 0.658 \\\hline 4 & 0.613 & 0.592 & 0.572 \\\hline\end{array}$$ What is the NPV of the project?

• A) $654,900 negative
• B) $590,000 positive
• C) $615,455 positive
• D) $590,850 negative

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Definitions:

Circadian Rhythms

Biological processes that display an endogenous, entrainable oscillation of about 24 hours, influencing sleep patterns, feeding behavior, hormone production, and other bodily functions.

Photoperiodism

The physiological response of organisms to the length of day or night, affecting behaviors such as flowering in plants and mating in animals.

Regulates

To control or maintain the rate or speed of a process or system to make it operate correctly.

Methyl Salicylate

An organic ester naturally produced by many plants and is commonly used in muscle pain relief creams for its anti-inflammatory and pain-relieving properties.