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Rearden Metal Needs to Order a New Blast Furnace That

Question 35

Multiple Choice

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 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.

Correct Answer:

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