$$\text { Reference: } 10 - 03$$ Apex Corp Is Planning to Buy Production Machinery Costing $100,000

question 60

Multiple Choice

$$\text { Reference: } 10 - 03$$ Apex Corp. is planning to buy production machinery costing $100,000. This machinery's expected useful life is five years, with no residual value. Apex uses a discount rate of 10% and has calculated the following data pertaining to the purchase and operation of this machinery: $$\begin{array} { | c | c | } \hline \text { Year } & { \begin{array} { c } \text { Estimated } \\\text { annual net } \\\text { cash inflow }\end{array} } \\\hline 1 & \$ 60,000 \\\hline 2 & 30,000 \\\hline 3 & 20,000 \\\hline 4 & 20,000 \\\hline 5 & 20,000 \\\hline\end{array}$$
-Some investment projects require that a company expand its working capital at the initiation of a project to service the greater volume of business that will be generated. Assuming a project in which the increased working capital will no longer be required after the end of the project, under the net present value method, these changes in working capital should be treated as:

• A)a future cash inflow for which discounting is necessary.
• B)irrelevant to the net present value analysis.
• C)both an initial cash outflow for which no discounting is necessary and a future cash inflow for which discounting is necessary.
• D)an initial cash outflow for which no discounting is necessary.

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Definitions:

Gender Identity

An individual's personal sense of their own gender, which may or may not align with the sex they were assigned at birth.

Status Variables

Variables that indicate or reflect an individual's social or professional position, often used in research to examine effects of social status on various outcomes.

Psychological Treatments

Therapeutic interventions designed to address and alleviate mental health issues primarily through verbal communication, behavior modification, and cognitive restructuring.

Independent Variable

The variable in an experiment that is manipulated or changed to observe its effect on the dependent variable.