Multiple Choice
Based upon the following cash flows, should Chipper Nipper Cookie Company introduce a new product, Rolling In Dough Pies? The initial investment is $180,000 and the cost of capital is 11.5%.
Years Cash Flows
1 $80,000
2 95,000
3 95,000
4 110,000
5 110,000
6 110,000
A) Yes, the rounded npv is $228, 940 and the irr is 46.62%
B) Yes, the rounded npv is $75,428.63 and the irr is 12.27%
C) No, the rounded npv is -$57,277.32 and the irr is 8.75%
D) No, the rounded npv is -$221,275.39 and the irr is 9.97%
Correct Answer:

Verified
Correct Answer:
Verified
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