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Based Upon the Following Cash Flows, Should Chipper Nipper Cookie

Question 88

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$80,0002$95,0003$95,0004$110,0005$110,0006$110,000\begin{array} { | l | l | } \hline \text { Years } & \text { Cash Flows } \\\hline 1 & \$ 80,000 \\\hline 2 & \$ 95,000 \\\hline 3 & \$ 95,000 \\\hline 4 & \$ 110,000 \\\hline 5 & \$ 110,000 \\\hline 6 & \$ 110,000 \\\hline\end{array}


A) Yes, the rounded NPV is $228, 940.00 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%.

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