(Ignore Income Taxes in This Problem $\begin{array}{lrr} \text {Years 1-10 } &£ 85,000\\ \text {Years 11 } &£(20,000)\\ \text { Years 12} &£ 95,000\\\end{array}$

question 16

Multiple Choice

(Ignore income taxes in this problem.) Murdock Company has a chance to make and sell a new plastic five-gallon container. The company estimates that the net cash flows (sales less cash operating expenses) arising from manufacture and sale of the new container would be as follows (numbers in parentheses indicate an outflow) : $\begin{array}{lrr} \text {Years 1-10 } &£ 85,000\\ \text {Years 11 } &£(20,000) \\ \text { Years 12} &£ 95,000\\\end{array}$

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Murdock would need to purchase production equipment costing £200,000 now to use in the manufacture of the new containers. This equipment would have a 12-year life and a £20,000 salvage value. Murdock Company's required rate of return is 12%. The net present value of all cash flows associated with this investment (rounded to the nearest thousand pounds) is

• A)£304,000.
• B)£380,000.
• C)£318,000.
• D)£298,000.

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Definitions:

Company Goal-setting

The process of establishing objectives for a company to achieve, guiding its future direction and decision-making.

Charisma

A personal attribute that enables an individual to attract, influence, and inspire enthusiasm and devotion in others through appeal, personality, and leadership ability.

Leadership Skill

Competencies and abilities that enable an individual to guide, influence, and direct a group towards achieving a common goal.

Democratic Leaders

A leadership style characterized by the sharing of decision-making responsibilities between the leader and group members, promoting group member engagement, creativity, and a sense of equality.