Findell Corporation Is Considering Two Projects, a and B, and It

question 61

Multiple Choice

Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the projects: What is the net present value of cash flows for project B?
$$\begin{array} { | l | l | l | } \hline & \text { Project A } & \text { Project B } \\\hline \text { Useful life } & 5 \text { years } & \text { 5 years } \\\hline \text { Present value of cash inflows } & \$ 84,360 & \$ 55,100 \\\hline \text { Present value of cash outflows } & \$ 77,000 & \$ 49,000 \\\hline & & \\\hline\end{array}$$

• A)$7,360
• B)$6,100
• C)$1,260
• D)None of these answers is correct.

---

Definitions:

Volatile

Referring to a substance that changes state or quality easily, or, in financial contexts, to markets or prices that change rapidly and unpredictably.

Venture Capital Fund

A pool of money managed by professionals that is used to invest in high-growth potential startups and early-stage companies.

High-Risk

Situations or investments where there is a high probability of loss but also a potential for more significant than average gains.

Household Savings

The portion of disposable income that is not used for consumption, but is set aside for future spending, emergencies, or investments.