Use This Information to Answer Questions 13-15

question 17

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.Based on the net present value,

• A) the project can be accepted because the net present value is positive.
• B) the project should be rejected because the net present value is negative.
• C) the project can be accepted because the net present value is negative.
• D) the project should be rejected because the net present value is positive.

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Definitions:

Product Life Cycle

The stages a product goes through from development and introduction to the market, through growth and maturity, and eventually its decline.

Brand Elements

Characteristics that identify the sponsor of a specific ad.

Logo

A graphical symbol used to identify a company, brand, or product, often designed for easy recognition.

Slogans

Short, memorable phrases used in advertising campaigns to convey the essence of a brand or to promote products and services.