Use the following information to answer questions 10-12.
General Candy, Inc., a U.S. firm, manufactures and sells candies worldwide. Because of a rising price of sugar in the U.S., the company is considering to build a new plant in the U.K. The plant will cost £15 million to build. Assume that the plant will have a life of 3 years before it is confiscated by the British government zero salvage value and the discount rate of the cash flows is 10%. Consider the following cash flows for this project.
Table 9.1:

-Refer to Table 9.1.The net present value NPV of this project in U.S.dollar is estimated at:
A) $2.86 million
B) $3.65 million
C) $4.56 million
D) - $9.21 million

Question

Use the following information to answer questions 10-12.
General Candy, Inc., a U.S. firm, manufactures and sells candies worldwide. Because of a rising price of sugar in the U.S., the company is considering to build a new plant in the U.K. The plant will cost £15 million to build. Assume that the plant will have a life of 3 years before it is confiscated by the British government zero salvage value and the discount rate of the cash flows is 10%. Consider the following cash flows for this project.
Table 9.1:
 
-Refer to Table 9.1.The net present value NPV of this project in U.S.dollar is estimated at:
A) $2.86 million 
B) $3.65 million 
C) $4.56 million 
D) - $9.21 million

Quizplus · Accepted Answer

The Answer is C

Use the Following Information to Answer Questions 10-12