Parks Company Is Considering an Investment Proposal in Which a Working

question 36

Multiple Choice

Parks Company is considering an investment proposal in which a working capital investment of $10,000 would be required.The investment would provide cash inflows of $2,000 per year for six years.The working capital would be released for use elsewhere when the project is completed.If the company's discount rate is 10%,the investment's net present value is:

• A) ($1,290).
• B) $1,290.
• C) $2,000.
• D) $4,350.

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Definitions:

High Degree

A level of measurement or quantity that is considerably above the average or typical range.

Order

A taxonomic category made up of related families.

Potential Energy

The energy stored within a physical system due to the position, arrangement or state of its constituents, capable of causing movement.

Work

Any change in the state or motion of matter.