2. Rearden Metal needs to order a new blast furnace that will be delivered in one year. The $1,000,000 price for the blast furnace is due in one year when the new furnace is installed. The blast furnace manufacturer offers Rearden's Metal a discount of $50,000 if they pay for the furnace now. If the interest rate is 7%, then the NPV of paying for the furnace now is closest to: A) ($15,421). B) $15,421. C) ($46,729). D) $46,729.

2. Rearden Metal needs to order a new blast furnace that will be delivered in one year. The $1,000,000 price for the blast furnace is due in one year when the new furnace is installed. The blast furnace manufacturer offers Rearden's Metal a discount of $50,000 if they pay for the furnace now. If the interest rate is 7%, then the NPV of paying for the furnace now is closest to: A) ($15,421). B) $15,421. C) ($46,729). D) $46,729.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8MC: Grummet Company is acquiring a new wood lathe with a cash purchase price of $80,000. The Wood Master...

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Question

2. Rearden Metal needs to order a new blast furnace that will be delivered in one year. The
$1,000,000 price for the blast furnace is due in one year when the new furnace is installed.
The blast furnace manufacturer offers Rearden's Metal a discount of $50,000 if they pay
for the furnace now. If the interest rate is 7%, then the NPV of paying for the furnace now
is closest to:
A) ($15,421).
B) $15,421.
C) ($46,729).
D) $46,729.

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