Given the Following Information and Assuming a 20% CCA Class

question 14

Multiple Choice

Given the following information and assuming a 20% CCA class, what is the NPV for this project? Initial investment in fixed assets = $800,000; initial investment in net working capital = $200,000;
Life = four years; after-tax cost savings = $250,000 per year; salvage value = $30,000; tax rate =
35%; discount rate = 16%.

• A) $95,101
• B) $105,967
• C) $147,261
• D) $187,098
• E) $418,198

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Definitions:

Flexible Manufacturing System

An approach to manufacturing that allows for the easy adaptation of processes and machines to make different products or parts.

Inventory Control

The processes and strategies used to manage the ordering, storing, and use of components or products to minimize costs and meet customer demand.

Professional Service

Expert services offered by individuals or firms, typically requiring certification or advanced education.

Human Resources

The division of a company involved in recruiting, hiring, training, and managing employees, focusing on enhancing workforce performance and compliance.