You Are Evaluating a Project for the Ultimate Recreational Tennis

question 348

Multiple Choice

You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that wimpy backhand. You estimate the sales price of The Ultimate to be $400 and sales volume to be
1,000 units in year 1, 1,250 units in year 2, and 1,325 units in year 3. The project has a three year life.
Variable costs amount to $225 per unit and fixed costs are $100,000 per year. The project requires
An initial investment of $165,000 which is depreciated straight-line to zero over the three year
Project life. The actual market value of the initial investment at the end of year 3 is $35,001. Initial
Net working capital investment is $75,000 and NWC will maintain a level equal to 20% of sales each
Year thereafter. The tax rate is 34% and the required return on the project is 10%.
What is the total cash flow for the project in year 3?

• A) $126,461
• B) $178,156
• C) $194,945
• D) $234,838
• E) $239,100

Analyze the role of coordination, control, and command within the management functions framework.

Appreciate the importance of human relations and social aspects in workplace productivity and motivation.

Recognize various management theories, including scientific management, administrative principles, and behavioral approaches, and their application in organizational settings.

Understand the importance of clear communication channels and the principle of the scalar chain in organizations.

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Definitions:

Skill Transferability

The extent to which skills acquired in one context or job can be effectively applied to another.

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or society.

Earnings

Earnings refer to the amount of money that an individual receives in exchange for their labor or investment, commonly understood as income.

English-language Skills

The ability to understand, speak, read, and write in English, often considered critical for communication in global business and education contexts.