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Based Upon the Following Cash Flows, Should Ooey Gooey Candy

Question 50

Multiple Choice

Based upon the following cash flows, should Ooey Gooey Candy Makers introduce a new product, Skinny Minnie Diet Cuisine? The initial investment is $780,000 and the cost of capital is 12.2%.
 Years  Cash Flare 1190,0002105,0003105,0004195,0005195,0000195,000\begin{array} { | c | c | } \hline \text { Years } & \text { Cash Flare } \\\hline 1 & 190,000 \\\hline 2 & 105,000 \\\hline 3 & 105,000 \\\hline 4 & 195,000 \\\hline 5 & 195,000 \\\hline 0 & 195,000 \\\hline\end{array}


A) Yes, the npv is $288,410.60 and the irr is 38.2%.
B) Yes, the npv is $175,478.98 and the irr is 20.42%.
C) No, the npv is -$211,589.40 and the irr is 3.24%.
D) No, the npv is -$75,375.18 and the irr is 11.75%.

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