A New, More Efficient Machine Will Last 4 Years and Allow

question 27

Multiple Choice

A new, more efficient machine will last 4 years and allow inventory levels to decrease by $100,000 over its life. At a cost of capital of 13%, how does the net working capital change affect the project's NPV?

• A) NPV increases by $38,668.13.
• B) NPV increases by $61,330.09.
• C) NPV will not change.
• D)NPV increases by $100,000.

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Definitions:

Preconscious

The thoughts, feelings, and memories that a person is not consciously aware of at the moment but that may be easily brought to consciousness.

Emotional Awareness

The ability to recognize and understand one's own feelings and emotions, as well as those of others.

Short-term Memory

A capacity for holding a small amount of information in mind in an active, readily available state for a short period.

Relatively Stable

Relatively Stable refers to a condition or state that does not easily change or fluctuate significantly over time, indicating consistency and steadiness.