Carlyle Inc

question 38

Multiple Choice

Carlyle Inc. is considering two mutually exclusive projects. Both require an initial investment of $15,000 at t = 0. Project S has an expected life of 2 years with after-tax cash inflows of $7,000 and $12,000 at the end of Years 1 and 2, respectively. In addition, Project S can be repeated at the end of Year 2 with no changes in its cash flows. Project L has an expected life of 4 years with after-tax cash inflows of $5,200 at the end of each of the next 4 years. Each project has a WACC of 9.00%. What is the equivalent annual annuity of the most profitable project?

• A) $ 569.97
• B) $ 782.34
• C) $ 865.31
• D) $1,522.18
• E) $1,846.54

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Definitions:

Initial Establishment

The first phase of starting or founding a new business, organization, or other venture, characterized by planning, decision-making, and implementation.

EHR Program

An Electronic Health Record (EHR) Program involves software systems designed to manage healthcare information electronically, enhancing patient care and documentation.

Full-Time Provider

A medical or healthcare professional who offers services to patients on a full-time basis, typically working 40 or more hours per week.

Electronic Scheduler

A digital tool or software used for arranging, controlling, and optimizing appointments and meetings.