What Is the NPV of a Project That Costs $100,000

question 122

Multiple Choice

What is the NPV of a project that costs $100,000, provides $23,000 in cash flows annually for six years, requires a $5,000 increase in net working capital, and depreciates the asset at 15 percent declining balance over six years and sold at zero salvage value? The discount rate is 14 percent.The tax rate is 40 percent.

• A)-$23,460
• B)-$13,283
• C)$13,283
• D)$44,866

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Definitions:

Representational Thought

The ability to use symbols, signs, or internal images to represent objects, actions, or ideas that are not physically present.

Symbolic Play

Play in which one object stands for, or represents, another.

Circular Reactions

Repetitive actions carried out by infants, initially by chance and then intentionally, to explore and learn about their environment.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or touched, a concept developed in early childhood.