A Project Will Produce Operating Cash Flows of $57,000 a Year

question 159

Multiple Choice

A project will produce operating cash flows of $57,000 a year for 3 years. During the life of the project, inventory will be lowered by $10,000 and accounts receivable will increase by $20,001. Accounts payable will decrease by $5,001. The project requires the purchase of equipment at an initial cost of $90,001. The equipment will be salvaged at the end of the project creating a $17,000 after-tax cash inflow. At the end of the project, net working capital will return to its normal level. What is the net present value of this project given a required return of 12%?

• A) $42,908.17
• B) $44,141.41
• C) $48,772.08
• D) $54,681.35
• E) $56,209.19

Distinguish between different types of time series patterns such as trend, seasonal, and cyclical effects.

Utilize historical data to make future sales forecasts using methods like moving average models and exponential smoothing.

Apply the Delphi method for expert opinion-based forecasting and understand its process.

Analyze sales data to identify underlying patterns and forecast future sales.

---

Definitions:

Histograms

A graphical representation of the distribution of numerical data, showing the frequency of data points in successive numerical intervals.

Cardiac Patients

Individuals receiving medical attention for conditions related to the heart.

Aspirin

A medication used to reduce pain, fever, or inflammation, known chemically as acetylsalicylic acid.

Emergency Room

A specialized department in a hospital that provides immediate treatment for acute illnesses and trauma.