A Five-Year Project Requires an Additional Commitment of $100,000 in Net

question 26

Multiple Choice

A five-year project requires an additional commitment of $100,000 in net working capital.What is the present value opportunity cost associated with this investment?

• A)$100,000
• B)the present value of $100,000, discounted at the firm's cost of capital
• C)the value of $100,000, netted against the discounted present value of the $100,000 of working capital returned at the end of the project
• D)no opportunity cost is involved

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Definitions:

Net New Jobs

The total number of jobs created in an economy over a specific time frame, after accounting for job losses, showcasing the employment growth rate.

Industry Employment

The aggregate number of jobs or positions filled or available in a specific industry or sector of the economy.

Intellectual Capital

The valuable skills and knowledge that employees of a business possess.

Process Innovation

The implementation of new or significantly improved production or delivery methods in a business.