Use the Information Below to Answer the Following Question(s)

question 26

Multiple Choice

Use the information below to answer the following question(s) .
Sommer Corporation is deciding whether to automate one phase of its production process. The equipment has a six-year life and will cost $410,000. Projected net cash inflows from the equipment are as follows:
Sommer Corporation's hurdle rate is 12%. Assume the residual value is zero.
-The net present value of the Sommer Corporation equipment is closest to

• A) $(13,810).
• B) $2,302.
• C) $13,810.
• D) $15,000.

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Definitions:

Retro-

A prefix meaning backwards, behind, or reversing, often used in terms like "retroactive" or "retrovirus."

Prefix

An affix placed before a word, base, or another prefix to modify a term's meaning, such as by making it a negation, an intensification, or a specification.

Behind

Positioned at the back of something or towards the rear.

Cryosurgery

A surgical technique that uses extreme cold to destroy abnormal or diseased tissue, including cancer cells.