Thomson Media Is Considering Some New Equipment Whose Data Are

question 52

Multiple Choice

Thomson Media is considering some new equipment whose data are shown below. The equipment has a 3-year tax life and would be fully depreciated by the straight-line method over 3 years, but it would have a positive pre-tax salvage value at the end of Year 3, when the project would be closed down. Also, additional net operating working capital would be required, but it would be recovered at the end of the project's life. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV?

• A) $20,762
• B) $21,854
• C) $23,005
• D) $24,155
• E) $25,363

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Definitions:

mRNA

Messenger RNA, a single-stranded RNA molecule that carries genetic information from DNA to the ribosome, where it directs protein synthesis.

Genomic Library

A collection of DNA fragments that represents the entire genome of an organism.

DNA Fragments

Pieces of DNA that are the result of breaking the DNA molecule into smaller segments through various methods.

Plasmids

Small, circular, double-stranded DNA molecules found in bacteria and sometimes in eukaryotic organisms, separate from chromosomal DNA and capable of independent replication.