A New, More Efficient Machine Will Last Four Years and Allow

question 29

Multiple Choice

A new, more efficient machine will last four years and allow inventory levels to decrease by $100,000 during its life.At a cost of capital of 13 percent, how does the net working capital change affect the project's NPV?

• A)NPV increases by $38,668
• B)NPV increases by $61,330
• C)NPV increases by $100,000
• D)NPV increases by $138,668

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Definitions:

Situational Norms

Socially accepted behaviors that vary depending on context and environment.

Highly Accessible

Pertains to information, resources, or locations that can be easily reached or obtained.

Attitude

A psychological tendency expressed by evaluating a particular entity with some degree of favor or disfavor.

Persuasive Communication

The technique of using messages to inform, influence, or convince individuals to change their beliefs, attitudes, or actions.