(Ignore Income Taxes in This Problem

question 66

Multiple Choice

(Ignore income taxes in this problem.) Shields Company has gathered the following data on a proposed investment project:
-The net present value on this investment is closest to:

• A)$400,000
• B)$80,000
• C)$91,600
• D)$76,750

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Definitions:

Natural Resource

Refers to resources found in nature that are used for economic gain, such as minerals, forests, water, and land.

Depletion

Amount of natural resources that has been exhausted by mining, pumping, and so forth for a period of time.

Patent

A legal right granted by the government to an inventor, giving them exclusive rights to make, use, sell, and import an invention for a certain period of time.

Amortization Expense

An operating expense on the income statement relating to intangible assets.