A Project Will Produce an Operating Cash Flow of $14,600

question 93

Multiple Choice

A project will produce an operating cash flow of $14,600 a year for 8 years. The initial fixed asset investment in the project will be $48,900. The net aftertax salvage value is estimated at $11,000 and will be received during the last year of the project's life. What is the net present value of the project if the required rate of return is 12 percent?

• A)$23,627.54
• B)$28,070.26
• C)$34,627.54
• D)$39,070.26
• E)$41,040.83

---

Definitions:

Sensation-Seeking Behaviors

Actions that are pursued to achieve heightened states of arousal or intense experiences.

Drive-Reduction Theory

A theory of motivation stating that behavior is motivated by the desire to reduce internal drives, such as hunger or thirst, that cause physiological discomfort.

Homeostasis

The process by which a stable internal environment is maintained within an organism, regardless of external changes.

Reduce Drives

The psychological concept of decreasing or satisfying basic physiological or psychological needs to reach a state of equilibrium.