Simpson,Inc

question 68

Multiple Choice

Simpson,Inc.is considering a five-year project that has an initial after-tax outlay or after-tax cost of $80,000.The respective future cash inflows from its project for years 1,2,3,4 and 5 are: $15,000,$25,000,$35,000,$45,000 and $55,000.Simpson uses the net present value method and has a discount rate of 9%.Will Simpson accept the project?

• A)Simpson accepts the project because the NPV is $129,455.25.
• B)Simpson accepts the project because the NPV is 79,455.25.
• C)Simpson accepts the project because the NPV is $49,455.25.
• D)Simpson accepts the project because the NPV is less than zero.

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Definitions:

Long Bone

A type of bone that is longer than it is wide, found in the arms, legs, hands, and feet, playing a crucial role in support and movement.

Primary Location

The primary location refers to the main or principal place where an event occurs or where an entity or organization is situated.

Arms and Legs

The four limbs of the human body, with arms being the upper limbs connected to the shoulder and legs being the lower limbs connected to the hips.

Yellow Marrow

A type of bone marrow primarily consisting of fat cells, found in the cavities of long bones.