ABC, Inc Is Considering a Project That Requires $21,000 in Net

question 90

Multiple Choice

ABC, Inc. is considering a project that requires $21,000 in net working capital and $121,000 in fixed assets, which belong in a 30% CCA class. The fixed assets have a salvage value of 28,500 at the
End of the 3 year project. The after-tax operating income of the project is $61,300 per year. The tax
Rate is 35% and the required rate of return is 16%. What is the NPV of this project?

• A) $21,887
• B) $34,226
• C) $48,933
• D) $54,289
• E) $67,386

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Definitions:

Correlation Coefficients

Statistical measures that indicate the strength and direction of a linear relationship between two quantitative variables.

Specialized Abilities

Distinct skills or competencies in specific areas of functioning, indicating a higher level of capability in those areas compared to general abilities.

G Factor

The general intelligence factor, considered as a measure of an individual's overall intelligence as opposed to specific abilities.

Positive Intercorrelations

Positive intercorrelations refer to a statistical relationship where increases in one variable are associated with increases in another, indicating a positive link between them.