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Based Upon the Following Cash Flows, Should Ooey Gooey Candy

Question 93

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 Flows 1$90,0002$105,0003$105,0004$195,0005$195,0006$195,000\begin{array} { | l | l | } \hline \text { Years } & \text { Cash Flows } \\\hline 1 & \$ 90,000 \\\hline 2 & \$ 105,000 \\\hline 3 & \$ 105,000 \\\hline 4 & \$ 195,000 \\\hline 5 & \$ 195,000 \\\hline 6 & \$ 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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