The Whilst Co

question 362

Multiple Choice

The Whilst Co. is analyzing a project that has projected sales of $189,400 and costs of $102,301. The project requires an investment in inventory of $15,000 plus another $28,000 in accounts
Receivable. Fixed assets of $80,000 are needed and belong in a 30% CCA class. Accounts payable
Will increase by $36,001. An interest expense of $11,000 will be incurred annually. The project has a
Life of 3 years. At the end of the three years, the equipment has an estimated market value of
$26,001. The company requires a 14% rate of return and is in the 34% marginal tax bracket. What is
The net present value of this project?

• A) $65,887
• B) $68,023
• C) $81,921
• D) $91,425
• E) $93,608

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Definitions:

Standard Deviation

is a statistical measure that quantifies the amount of variation or dispersion of a set of values around the mean (average) value.

Standard Score

A score that has been transformed to fit a given mean and standard deviation, facilitating the comparison across different tests or assessment measures.

Internal Consistency Reliability

A measure of the extent to which items on a test measure the same construct or characteristic.

Ratio Scale

A scale of measurement that has a meaningful zero point and equal intervals and thus can be manipulated by all mathematical principles.