Reference: 10-01
Shields Company Has Gathered the Following Data on a Proposed

Reference: 10-01
Shields Company has gathered the following data on a proposed investment project: $$\begin{array} { | l | l | } \hline \text { Investment required in equipment } & \$ 400,000 \\\hline \text { Annual cash inflows } & \$ 80,000 \\\hline \text { Salvage value } & \$ \quad 0 \\\hline \text { Life of the investment } & 10 \text { years } \\\hline \text { Discount rate } & 10 \% \\\hline\end{array}$$
-The net present value on this investment is closest to:

A) $76,750.
B) $400,000.
C) $91,600.
D) $80,000.

Correct Answer:

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