A Project Requires the Purchase of Machinery for $40,000

question 209

Multiple Choice

A project requires the purchase of machinery for $40,000. The machinery belongs in a 20% CCA class and will have a salvage value of $4,000 at the end of the 4 year project. It will require a net
Working capital investment of $5,000 up-front. The firm has a tax rate of 34% and a required return
Of 10%. The project generates after-tax operating income of $10,001. What is the project's NPV?

• A) -$2,724
• B) $881
• C) $1,393
• D) $2,394
• E) $2,942

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Definitions:

Life Structure

The pattern or organization of one's life, shaped by roles, relationships, and activities, as conceptualized in developmental psychology.

Levinson

Refers to Daniel Levinson, a psychologist who developed theories on human development, focusing on the stages of life, particularly adult development.

Seasons Of Life

A set of life phases that Levinson concluded adults progress through in which life structures are constructed, tested, and modified, based on experiences and opportunities.

Executive Function

Brain processes that enable an individual to plan, focus attention, remember instructions, and juggle multiple tasks successfully.