Exhibit 14-1
Assume That Baps Corporation Is Considering the Establishment

question 61

Multiple Choice

Exhibit 14-1
Assume that Baps Corporation is considering the establishment of a subsidiary in Norway. The initial investment required by the parent is $5,000,000. If the project is undertaken, Baps would terminate the project after four years. Baps' cost of capital is 13%, and the project is of the same risk as Baps' existing projects. All cash flows generated from the project will be remitted to the parent at the end of each year. Listed below are the estimated cash flows the Norwegian subsidiary will generate over the project's lifetime in Norwegian kroner (NOK) :
$\begin{array}{llcc}\underline{\text { Year 1 }} & \underline{\text { Year 2 }}& \underline{\text { Year 3 }}& \underline{\text { Year 4 }} \\\text { NOK10.000.000 }&\text { NOK15.000.000 }& \text { NOK17.000.000 }& \text { NOK20.000.000 }\\\end{array}$



The current exchange rate of the Norwegian kroner is $.135. Baps' exchange rate forecast for the Norwegian kroner over the project's lifetime is listed below:
$$\frac { \text { Year 1 } } { \$ 13 } \quad \frac { \text { Year 2 } } { \$ 14 } \quad \frac { \text { Year 3 } } { \$ 12 } \quad \frac { \text { Year 4 } } { \$ .15 }$$
-Refer to Exhibit 14-1. What is the net present value of the Norwegian project?

• A) -$803,848.
• B) $5,803,848.
• C) $1,048,829.
• D) none of the above

Recognize the significance of introspection and its role in the initial study of psychology.

Appreciate the intellectual and disciplinary origins of psychology.

Understand the establishment of psychology as an independent discipline.

Acknowledge the role of the American Psychological Association in psychology.

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Definitions:

Product Development

The complete process of bringing a new product or improving an existing one to the market, from idea conception to final production.

Customer Response Time

The duration it takes for a business to reply to a customer inquiry or request.

Customer Profitability Analysis

The process of determining the profit or loss attributed to a particular customer, identifying which relationships are most beneficial.

Product Contribution Analysis

A financial evaluation technique that assesses how individual products contribute to the overall profit of a company based on their contribution margins.