Park & Company Was Recently Formed with a $25,000 Investment

question 73

Multiple Choice

Park & Company was recently formed with a $25,000 investment in the company by stockholders in exchange for common stock.The company then borrowed $10,000 from a local bank,purchased $5,000 of supplies on account,and also purchased $25,000 of equipment by paying $10,000 in cash and signing a promissory note for the balance.Based on these transactions,the company's total assets are:

• A)$35,000.
• B)$45,000.
• C)$50,000.
• D)$55,000.

Interpret the effects of depreciation, operational costs reduction, and salvage value on the cash flow of an investment project.

Master the calculation of the payback period for investment projects and its relevance in investment decisions.

Understand the treatment of working capital in investment project evaluations.

Recognize the reinvestment assumption inherent in the IRR and NPV methods.