Use This Information to Answer Questions 13-15

question 47

Multiple Choice

Use this information to answer questions 13-15.
Big Can, Inc., a U.S. firm, manufactures and sells aluminum cans worldwide. Because of a rising price of aluminum in the U.S., the company is considering to build a new plant in Europe. The plant will cost €20 million to build. Assume that the plant will have a life of 3 years before it is confiscated by the European government zero salvage value and the discount rate of the cash flows is 10%. Consider the following cash flows for this project.
Table 9.2

-Refer to Table 9.2.The net present value NPV of this project in U.S.dollar is estimated at:

• A) - $0.11million
• B) - $1.27 million
• C) $2.33 million
• D) $1.14 million

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Definitions:

Closing Accounts

The process of finalizing all ledger accounts to prepare financial statements at the end of an accounting period.