A Company Needs an Increase in Working Capital of $50,000

question 97

Multiple Choice

A company needs an increase in working capital of $50,000 in a project that will last 4 years. The company's tax rate is 30% and its after-tax discount rate is 8%. Use Exhibit 7B-1 to determine the appropriate discount factor(s) using table.
The present value of the release of the working capital at the end of the project is closest to:

• A) $36,750
• B) $15,000
• C) $25,726
• D) $35,000

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Definitions:

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Documentation of an individual's financial transactions and essential personal data.

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The rules and guidelines that businesses follow to report financial information consistently and accurately.

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The part of the economy that is owned and operated by individuals and companies for profit, and is not controlled by the state.

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An independent organization responsible for establishing and improving financial accounting standards in the United States.