Rogue River,Inc

question 87

Multiple Choice

Rogue River,Inc.is considering a project that has an initial after-tax outlay or after-tax cost of $220,000.The respective future cash inflows from its four-year project for years 1 through 4 are: $50,000,$60,000,$70,000 and $80,000.Rogue River uses the net present value method and has a discount rate of 11%.Will Rogue River accept the project?

• A)Rogue River accepts the project because the NPV is greater than $10,000.00.
• B)Rogue River rejects the project because the NPV is about -$22,375.73.
• C)Rogue River rejects the project because the NPV is about -$12,375.60.
• D)Rogue River rejects the project because the NPV is about -$2,375.60.

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Definitions:

Vocal Cords

Paired bands of muscle tissue in the larynx that vibrate to produce sound for speech.

Alveoli

Tiny air sacs in the lungs where the exchange of oxygen and carbon dioxide takes place, essential for respiration.

Bronchus

One of the two main branches of the trachea that lead directly into the lungs, providing a pathway for air flow.