Which of the of the following most closely approximates what the project's NPV would be when using straight-line depreciation? (Hint: Round your final answer to two decimal places and choose the value that most closely matches your answer.) $55,503.98 $67,189.03 $58,425.24 $73,031.55 Using the bonus depreciation method will result in the highest NPV for the project. No other firm would take on this project if Fox turns it down. Which of the following most closely approximates how much Fox should reduce the NPV of this project, assuming it is discovered that this project would reduce one of its division's net after-tax cash flows by $400 for each year of the four- year project? (Hint: Round your final answer to two decimal places and choose the value that most closely matches your answer.) $744.59 $930.74 $1,240.98 $1,054.83 Fox spent $2,250 on a marketing study to estimate the number of units that it can sell each year. What should Fox do to take this information into account? Increase the amount of the initial investment by $2,250. Increase the NPV of the project $2,250. The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost.
Which of the of the following most closely approximates what the project's NPV would be when using straight-line depreciation? (Hint: Round your final answer to two decimal places and choose the value that most closely matches your answer.) $55,503.98 $67,189.03 $58,425.24 $73,031.55 Using the bonus depreciation method will result in the highest NPV for the project. No other firm would take on this project if Fox turns it down. Which of the following most closely approximates how much Fox should reduce the NPV of this project, assuming it is discovered that this project would reduce one of its division's net after-tax cash flows by $400 for each year of the four- year project? (Hint: Round your final answer to two decimal places and choose the value that most closely matches your answer.) $744.59 $930.74 $1,240.98 $1,054.83 Fox spent $2,250 on a marketing study to estimate the number of units that it can sell each year. What should Fox do to take this information into account? Increase the amount of the initial investment by $2,250. Increase the NPV of the project $2,250. The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost.
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 8QTD
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Transcribed Image Text:Which of the of the following most closely approximates what the project's NPV would be when using straight-line depreciation? (Hint: Round your
final answer to two decimal places and choose the value that most closely matches your answer.)
$55,503.98
$67,189.03
$58,425.24
$73,031.55
Using the
bonus
depreciation method will result in the highest NPV for the project.
No other firm would take on this project if Fox turns it down. Which of the following most closely approximates how much Fox should reduce the NPV
of this project, assuming it is discovered that this project would reduce one of its division's net after-tax cash flows by $400 for each year of the four-
year project? (Hint: Round your final answer to two decimal places and choose the value that most closely matches your answer.)
$744.59
$930.74
$1,240.98
$1,054.83
Fox spent $2,250 on a marketing study to estimate the number of units that it can sell each year. What should Fox do to take this information into
account?
Increase the amount of the initial investment by $2,250.
Increase the NPV of the project $2,250.
The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost.
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