Underwater Experimental Is Considering a Project Which Requires the Purchase

question 41

Multiple Choice

Underwater Experimental is considering a project which requires the purchase of $498,000 of fixed assets.The net present value of the project is $22,500.Equity shares will be issued as the sole means of financing the project.What will the new book value per share be after the project is implemented given the following current information on the firm?

• A)$13.25
• B)$13.70
• C)$14.23
• D)$14.94
• E)$15.60

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Definitions:

Extra Capacity

Additional production or service ability that exceeds normal operations requirements.

Late Night Shift

A work shift that takes place during the late evening to early morning hours, often outside standard business hours.

Minimum Requirements

The least or lowest acceptable standards or quantities needed to achieve a specific goal or function.

FCFS

First Come, First Served, a method of service or resource allocation where requests are processed in the order that they were received.