Use the information for the question(s)below.
-The owner of a hair salon spends $1 000 000 to renovate its premises, estimating that this will increase her cash flow by $220 000 per year. She constructs the above graph, which shows the net present value (NPV)as a function of the discount rate. At what discount rate does her decision to renovate become untenable?
A)4.8%
B)4.0%
C)3.0%
D)3.3%

Question

Use the information for the question(s)below. 
-The owner of a hair salon spends $1 000 000 to renovate its premises, estimating that this will increase her cash flow by $220 000 per year. She constructs the above graph, which shows the net present value (NPV)as a function of the discount rate. At what discount rate does her decision to renovate become untenable?
A)4.8% 
B)4.0% 
C)3.0% 
D)3.3%

Quizplus · Accepted Answer

The Answer of Use the information for the question(s)below. 
-The owner of a hair salon spends $1 000 000 to renovate its premises, estimating that this will increase her cash flow by $220 000 per year. She constructs the above graph, which shows the net present value (NPV)as a function of the discount rate. At what discount rate does her decision to renovate become untenable?
A)4.8% 
B)4.0% 
C)3.0% 
D)3.3%

Use the Information for the Question(s)below