Finance Multiple Choice Questions
$23.11 |
7.54% |
$104.27 |
Long-term
debt |
The
company will take on too many high-risk projects and reject too many low-risk
projects. |
9.67% |
$
92.37 |
2.08% |
1.88
years |
10.(TCO H) TexMex Food Company is considering a new salsa whose data are shown below. The equipment to be used would be depreciated by the straight-line method over its three-year life and would have a zero salvage value, and no new working capital would be required. Revenues and other operating costs are expected to be constant over the project’s three-year life. However, this project would compete with other TexMex products and would reduce their pre-tax annual cash flows. What is the project’s NPV? (Hint: Cash flows are constant in years 1-3.)
a. $3,636 |
-
Rating:
5/
Solution: Answers to Finance Multiple Choice Questions