A company is considering an iron ore extraction project that requires an initial investment of $520,000 and will yield annual cash inflows of $156,000 for four years. The company's discount rate is 9%. What is the NPV of the project? Present value of an ordinary annuity of $1: 8% 9% 10% 1 2 3 45678 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 OA. $(104,000) OB. $14,560 OC. $(14,560) OD. $104,000 0.917 1.759 2.531 3.24 3.89 4.486 5.033 5.535 0.909 1.736 2.487 3.17 3.791 4.355 4.868 5.335 ....

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...
Question
A company is considering an iron ore extraction project that requires an initial investment of $520,000 and will yield annual cash inflows of
$156,000 for four years. The company's discount rate is 9%. What is the NPV of the project?
Present value of an ordinary annuity of $1:
8%
9%
10%
123456780
0.926
1.783
2.577
3.312
3.993
4.623
5.206
5.747
OA. $(104,000)
OB. $14,560
OC. $(14,560)
OD. $104,000
0.917
1.759
2.531
3.24
3.89
4.486
5.033
5.535
0.909
1.736
2.487
3.17
3.791
4.355
4.868
5.335
(...)
Transcribed Image Text:A company is considering an iron ore extraction project that requires an initial investment of $520,000 and will yield annual cash inflows of $156,000 for four years. The company's discount rate is 9%. What is the NPV of the project? Present value of an ordinary annuity of $1: 8% 9% 10% 123456780 0.926 1.783 2.577 3.312 3.993 4.623 5.206 5.747 OA. $(104,000) OB. $14,560 OC. $(14,560) OD. $104,000 0.917 1.759 2.531 3.24 3.89 4.486 5.033 5.535 0.909 1.736 2.487 3.17 3.791 4.355 4.868 5.335 (...)
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