A Project Is Expected to Create Operating Cash flOws of $68,300

question 97

Multiple Choice

A project is expected to create operating cash flows of $68,300 a year for 3 years. The initial cost of the fixed assets is $80,000. These assets will be worthless at the end of the project. An
Additional $6,000 of net working capital will be required throughout the life of the project. What is
The project's net present value if the required rate of return is 14%?

• A) $72,567.47
• B) $73,408.18
• C) $76,617.30
• D) $78,567.47
• E) $79,200.03

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Definitions:

Significance Level

The probability of rejecting the null hypothesis when it is true, used as a threshold in statistical hypothesis testing.

Medical Instruments

Tools and devices used in the practice of medicine for diagnosis, prevention, and treatment of diseases.

P-Value

The likelihood of encountering test outcomes as significant as or more than the actual observed results, assuming the null hypothesis is valid.

Null Hypothesis

The proposition that observed differences among specific populations are attributed to errors in sampling or experimentation, hence indicating no major divergence.