A Project Requires an Initial Investment of $10,000, Straight-Line Depreciable

question 325

Multiple Choice

A project requires an initial investment of $10,000, straight-line depreciable to zero over four years. The discount rate is 10%. Your tax bracket is 34% and you receive a tax credit for negative earnings in the year in which the loss occurs. Additional information for variables with forecast error are shown below. What is the base case NPV for the project?

• A) $1,523
• B) $4,974
• C) $5,247
• D) $6,529
• E) $8,281

---

Definitions:

Infections

The invasion and multiplication of microorganisms such as bacteria, viruses, and parasites that are not normally present within the body.

Cryptorchidism

A condition in which one or both of the testes fail to descend from the abdomen into the scrotum in males, often corrected with surgery.

Risk Factors

Elements or conditions that increase the likelihood of developing a disease or injury.