Margerit Is Reviewing a Project with Projected Sales of 1,500

question 49

Multiple Choice

Margerit is reviewing a project with projected sales of 1,500 units a year, a cash flow of $40 a unit and a three-year project life.The initial cost of the project is $95,000.The relevant discount rate is 15%.Margerit has the option to abandon the project after one year at which time she feels she could sell the project for $60,000.At what level of sales should she be willing to abandon the project?

• A)899 units
• B)923 units
• C)967 units
• D)1,199 units
• E)1,206 units

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Definitions:

Unsatiated

A feeling of not having one's desires or needs fulfilled.

Glucagon-like Peptide-1

A hormone that aids in regulating glucose levels in the blood by increasing insulin production.

Hypothalamus

A region of the brain responsible for producing hormones that control various bodily functions, including temperature regulation, hunger, moods, and the release of hormones from the pituitary gland.

Appetite

The innate craving to fulfill a physical necessity, particularly the need for nourishment.