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The Above Table Shows the Future Operating Profits from an Investment

Question 19

Multiple Choice

  The above table shows the future operating profits from an investment. The future operating profits are earned at the end of e the respective years. -Refer to the table above. If the discount rate is 5 percent and the cost of the investment is $43,000, which of the following is true regarding a profit- maximizing manager? A) The manager should not make the investment because the net present value is negative. B) The manager should make the investment because the net present value is positive. C) The manager should make the investment because the net present value is negative. D) The manager should not make the investment because the net present value is positive. The above table shows the future operating profits from an investment. The future operating profits are earned at the end of e the respective years.
-Refer to the table above. If the discount rate is 5 percent and the cost of the investment is $43,000, which of the following is true regarding a profit- maximizing manager?


A) The manager should not make the investment because the net present value is negative.
B) The manager should make the investment because the net present value is positive.
C) The manager should make the investment because the net present value is negative.
D) The manager should not make the investment because the net present value is positive.

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