As Assistant to the CFO of Boulder Inc

question 2

Multiple Choice

As assistant to the CFO of Boulder Inc., you must estimate the Year 1 cash flow for a project with the following data. What is the Year 1 cash flow?

• A) $5,950
• B) $6,099
• C) $6,251
• D) $6,407
• E) $6,568

---

Definitions:

Cost of Producing

The total expense incurred in the manufacture or production of a good, including raw materials, labor, and overhead.

Metal Alloy

A substance composed of two or more metals or a metal and a non-metal, mixed together to attain desired physical or chemical properties.

Fixed Proportions

A production technology assumption where inputs must be used in constant, unchanging ratios to produce outputs.

Average Cost

The total cost of production divided by the number of units produced, representing the cost per unit of output.