A New Project Is Expected to Generate an Operating Cash

question 95

Multiple Choice

A new project is expected to generate an operating cash flow of $75,560 and will initially free up $12,250 in net working capital.Purchases of fixed assets costing $75,000 will be required to start up the project.What is the total cash flow for this project at Time zero?

• A)-$64,410
• B)- $62,750
• C)-$75,000
• D)-87,250
• E)$62,250

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Definitions:

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Cognitive Biases

Cognitive biases are systematic patterns of deviation from norm or rationality in judgment, often leading to illogical interpretation or decision-making.

Behavioral Economics

A field of economics that examines how psychological, cognitive, emotional, cultural, and social factors affect the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.

Systematic Error

A consistent, predictable error present in the method of measurement that affects the accuracy of results.