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:

Nucleophile

A chemical entity that provides a pair of electrons to an electrophile, thus creating a chemical bond during a reaction.

NaCN

Sodium cyanide, a highly toxic chemical compound used in the extraction of gold and silver from mineral ores.

Bromides

Ionic compounds that contain a bromine ion (Br-) combined with another element or radical.

Reactivity

A measure of how readily a substance undergoes a chemical reaction with other substances.