Suppose a Company Has an Investment That Requires an After-Tax

question 52

Multiple Choice

Suppose a company has an investment that requires an after-tax incremental cash outlay of $12,000 today.It estimates that the expected future after-tax cash flows associated with this investment are $5,000 in years 1 and 2, and $8,000 in year 3.Using a 12.0% discount rate, determine the project's NPV.

• A)$16,071.43
• B)$14,144.50
• C)$4,071.43
• D)$2,144.50

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Definitions:

Appendicular Skeleton

The portion of the skeletal system that includes the limbs and the girdles (shoulder bones and pelvic bones) that connect them to the axial skeleton.

Pectoral Girdle

The structure that attaches the arms to the axial skeleton.

Pelvic Girdle

The structure that attaches the legs to the axial skeleton.

Second Cervical Vertebra

Also known as the axis, it is a bone in the neck that allows the head to rotate.