What Is the Expected NPV of the Project If the Option

question 75

Multiple Choice

What is the expected NPV of the project if the option to expand is not considered?

• A) $39,539
• B) $86,924
• C) $236,924
• D) $134,309

---

Definitions:

Financing Activity

Financial activities related to raising funds, repaying debt, and paying dividends, which are reflected in the cash flow statement.

Common Stock

A form of investment that signifies part ownership in a firm, granting the owner the right to vote and a portion of the corporation's earnings via dividends.

Land

An asset category in accounting, representing the earth's surface owned by an individual or entity, not depreciated over time.

Cash Flows

Represents the movement of money into and out of a business or financial entity, indicating its liquidity, financial health and ability to generate cash.