A New 5-Year Project Will Require $194,000 for Fixed Assets,$58,000

question 41

Multiple Choice

A new 5-year project will require $194,000 for fixed assets,$58,000 for inventory,and $42,000 for accounts receivable.Short-term debt is expected to increase by $46,000.The fixed assets will be depreciated straight-line to zero over the project's life and have an expected after-tax salvage value of $2,900.The net working capital returns to its original level at the end of the project.The tax rate is 34 percent,and the required return is 13 percent.What is the cash flow recovery from net working capital at the end of this project?

• A)$54,000
• B)$35,000
• C)$146,000
• D)$108,000
• E)$63,000

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Definitions:

Common-sense View

The intuitive or ordinary understanding of a situation or concept, without the need for scientific investigation.

Emotional Experience

The complex state of feeling resulting from the interaction between an individual's subjective cognitive interpretations and physiological responses.

Dangerous Situation

A scenario or environment where there is a significant risk of harm or injury.

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A theory of emotion that proposes emotions and physiological responses occur simultaneously and independently, rather than sequentially.