Roske Company Is Considering a Project with an Initial Investment

question 11

Multiple Choice

Roske Company is considering a project with an initial investment of $40,000 and annual cash inflows of $8,000 per year for seven years.The company's cost of capital is 12 percent.Factors for a 12 percent interest rate for seven years are shown below:
Future Value of $1 2.211
Present Value of $1 0.452
Future Value of an Annuity 10.089
Present Value of an Annuity 4.564
Using the net present value (NPV) to evaluate this proposal,the company should:

• A)invest in the proposal since the NPV is 36,512
• B)reject the proposal since the NPV is ($3,488).
• C)reject the proposal since the NPV is ($36,512).
• D)invest in the proposal since the NPV is $3,488.
• E)None of the answer choices is correct.

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Definitions:

Self-Management

The ability of an individual to manage their own actions, feelings, and thoughts effectively, often in pursuit of personal and professional goals.

Close Supervision

Hands-on and detailed oversight of tasks or activities, often to ensure standards are met or to provide guidance.

Good Follower

An individual who supports leaders by actively listening, being open to feedback, and contributing positively to achieving shared goals.

Emergent Leader

A group member who significantly influences another group member even though not having been assigned formal authority.