Your Firm Is Considering a Project with a Five-Year Life

question 64

Multiple Choice

Your firm is considering a project with a five-year life and an initial cost of $120,000.The discount rate for the project is 12 percent.The firm expects to sell 2,100 units a year.The cash flow per unit is $20.The firm will have the option to abandon this project after three years at which time it expects it could sell the project for $45,000.At what level of sales should the firm be willing to abandon this project?

• A)420 units
• B)1,332 units
• C)1,479 units
• D)1,618 units
• E)2,500 units

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Definitions:

Respiratory Pattern

The rhythm, rate, depth, and regularity of breathing, which can vary based on several factors including health status and activity level.

Abnormality

A deviation from the normal or typical structure, function, or behavior, which may indicate a pathological condition.

Tachycardia

A condition characterized by an abnormally fast heart rate, often defined as a heart rate over 100 beats per minute in adults.

Athletic Adult

An individual who engages in regular physical activity that goes beyond general fitness, focusing on specific sports or intensive training regimens.