Temple Corp ?
A) $25,831
B) $33,377
C) $34,828
D) $29,023
E)

question 47

Multiple Choice

Temple Corp.is considering a new project whose data are shown below.The equipment that would be used has a 3-year tax life,would be depreciated by the straight-line method over its 3-year life,and would have a zero salvage value.No change in net operating working capital would be required.Revenues and other operating costs are expected to be constant over the project's 3-year life.What is the project's NPV? Do not round the intermediate calculations and round the final answer to the nearest whole number.
? $$\begin{array} { l r } \text { Risk-adjusted WACC } & 10.0 \% \\\text { Net investment cost (depreciable basis) } & \$ 65,000 \\\text { Straight-line depr. rate } & 33.3333 \% \\\text { Sales revenues, each year } & \$ 71,500 \\\text { Annual operating costs (excl. depr.) } & \$ 25,000 \\\text { Tax rate } & 35.0 \%\end{array}$$
?

• A) $25,831
• B) $33,377
• C) $34,828
• D) $29,023
• E) $22,928

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Definitions:

Perfect Competitor

A theoretical market structure where many firms sell identical products, and no single seller can influence the market price.

Perfect Competition

A market structure characterized by many buyers and sellers, homogenous products, and free entry and exit, leading to efficient outcomes.

Marginal Revenue

The rise in earnings associated with the sale of one more unit of output.

Total Revenue Curve

A graphical representation showing how total revenue changes as the amount of goods sold varies.