MetalMouth Received a $1

question 23

Multiple Choice

MetalMouth received a $1.5 million government innovation grant. MetalMouth invested the grant money and developed a system to remove metal contaminants from storm water in shipyards. The firm estimates that each shipyard spends $400,000 a year on storm water clean-up efforts. If MetalMouth is able to sign up and retain four shipyards in the first year onwards, what is the present value (PV) of the project (net of investment) if the cost of capital for MetalMouth is 16% per year? Assume a cost of operations and other costs for SAP equal 60% of revenue.

• A) $1.9 million
• B) $2.5 million
• C) $2..1 million
• D) $2.3 million

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Definitions:

Debtor Assets

Properties or financial resources owned by an individual or entity who owes money to creditors.

Pay Judgment

A legal obligation to pay the amount of money awarded by a court in a lawsuit.

Discovery of Document

A legal process during litigation where parties are required to exchange documents relevant to the case.

Discovery Process

The pre-trial phase in a lawsuit where each party can request information and evidence from the other side to prepare for the case.