Net Present Value: Jenkins Roth Co

question 67

Multiple Choice

Net present value: Jenkins Roth Co. is investing in a new piece of equipment at a cost of $6 million. The project is expected to generate annual cash flows of $1,850,000 over the next six years. The company's cost of capital is 20 percent. What is the project's NPV?

• A) $722,604
• B) $351,097
• C) $152,194
• D) $261,008

---

Definitions:

Pectoralis Major

A large muscle in the upper chest that aids in the movement of the shoulder and the arm.

Deltoid

A large, triangular muscle covering the shoulder joint that is responsible for lifting the arm and giving the shoulder its range of motion.

Triceps Brachii

A muscle of the upper arm, responsible for extension of the elbow joint.

Forearm

The region of the arm between the elbow and the wrist, comprising two bones: the radius and the ulna.