Utah Technology has a weighted-average cost of capital of 8.85 percent and is evaluating project B. Project B involves an initial investment of $71,700.00 and an expected cash flow of $116,400.00 in 5 years. Project B is considered less risky than an average-risk project at Utah Technology, such that the appropriate discount rate for it is 1.70 percentage points different than the discount rate used for an average-risk project at Utah Technology. The internal rate of return for project B is 10.18 percent. What is the NPV of project B? -$0.00 (plus or minus $10) $4,474.71 (plus or minus $10) $10,712.31 (plus or minus $10) -$1,204.85 (plus or minus $10) None of the above is within $10 of the correct answer
Utah Technology has a weighted-average cost of capital of 8.85 percent and is evaluating project B. Project B involves an initial investment of $71,700.00 and an expected cash flow of $116,400.00 in 5 years. Project B is considered less risky than an average-risk project at Utah Technology, such that the appropriate discount rate for it is 1.70 percentage points different than the discount rate used for an average-risk project at Utah Technology. The internal rate of return for project B is 10.18 percent. What is the NPV of project B? -$0.00 (plus or minus $10) $4,474.71 (plus or minus $10) $10,712.31 (plus or minus $10) -$1,204.85 (plus or minus $10) None of the above is within $10 of the correct answer
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 6PB
Question
![Utah Technology has a weighted-average cost of capital of 8.85 percent and is evaluating project B. Project B involves an initial investment of $71,700.00 and
an expected cash flow of $116,400.00 in 5 years. Project B is considered less risky than an average-risk project at Utah Technology, such that the appropriate
discount rate for it is 1.70 percentage points different than the discount rate used for an average-risk project at Utah Technology. The internal rate of return
for project B is 10.18 percent. What is the NPV of project B?
-$0.00 (plus or minus $10)
$4,474.71 (plus or minus $10)
$10,712.31 (plus or minus $10)
-$1,204.85 (plus or minus $10)
None of the above is within $10 of the correct answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F19d0c0ee-b2f7-4400-bddc-d84e0eebb818%2F55a0dfc4-be92-49fa-afde-6200d1479b7e%2Fzetyttd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Utah Technology has a weighted-average cost of capital of 8.85 percent and is evaluating project B. Project B involves an initial investment of $71,700.00 and
an expected cash flow of $116,400.00 in 5 years. Project B is considered less risky than an average-risk project at Utah Technology, such that the appropriate
discount rate for it is 1.70 percentage points different than the discount rate used for an average-risk project at Utah Technology. The internal rate of return
for project B is 10.18 percent. What is the NPV of project B?
-$0.00 (plus or minus $10)
$4,474.71 (plus or minus $10)
$10,712.31 (plus or minus $10)
-$1,204.85 (plus or minus $10)
None of the above is within $10 of the correct answer
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
![Intermediate Financial Management (MindTap Course…](https://www.bartleby.com/isbn_cover_images/9781337395083/9781337395083_smallCoverImage.gif)
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning
![EBK CONTEMPORARY FINANCIAL MANAGEMENT](https://www.bartleby.com/isbn_cover_images/9781337514835/9781337514835_smallCoverImage.jpg)
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT