A Firm Has Total Equity of $88,700 and Total Liabilities

question 88

Multiple Choice

A firm has total equity of $88,700 and total liabilities of $20,300. Current assets are $66,300 and current liabilities are $15,200. What is the value of the net fixed assets?

• A)$8,300
• B)$10,600
• C)$29,500
• D)$35,800
• E)$42,700

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Definitions:

Initial Cost

Initial cost is the total expense incurred to acquire an asset or start a project, including purchase price and all related fees.

Net Present Value (NPV)

A financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time, used to assess the profitability of investments.

Internal Rate of Return (IRR)

A financial metric used to evaluate the profitability of investments, representing the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Cost of Capital

The rate of return that a company must pay to its capital providers, including both equity and debt holders, for using their capital in the business.