Use the Following Information to Answer Questions 10-12

question 12

Multiple Choice

Use the following information to answer questions 10-12.
General Candy, Inc., a U.S. firm, manufactures and sells candies worldwide. Because of a rising price of sugar in the U.S., the company is considering to build a new plant in the U.K. The plant will cost £15 million to build. Assume that the plant will have a life of 3 years before it is confiscated by the British government zero salvage value and the discount rate of the cash flows is 10%. Consider the following cash flows for this project.
Table 9.1:

-Refer to Table 9.1.The net present value NPV of this project in U.S.dollar is estimated at:

• A) $2.86 million
• B) $3.65 million
• C) $4.56 million
• D) - $9.21 million

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Definitions:

Bonus Method

An accounting technique used to record the transactions related to the admission of a new partner into a partnership by revaluing the existing partners' capital accounts.

Profits and Losses

A financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year.

Limited Liability Partnership

An agreement where a number of partners have their liabilities restricted, such that they are not individually accountable for the business's financial obligations.

Limited Liability Company

A flexible form of enterprise that blends elements of partnership and corporate structures, protecting members against personal liability beyond their investment.