Keyser Mining Is Considering a Project That Will Require the Purchase

question 69

Multiple Choice

Keyser Mining is considering a project that will require the purchase of $980,000 in new equipment. The equipment will be depreciated straight-line to a zero book value over the 7-year life of the project. The equipment can be scraped at the end of the project for 5 percent of its original cost. Annual sales from this project are estimated at $420,000. Net working capital equal to 20 percent of sales will be required to support the project. All of the net working capital will be recouped. The required return is 16 percent and the tax rate is 35 percent. What is the recovery amount attributable to net working capital at the end of the project?

• A)$21,000
• B)$54,600
• C)$84,000
• D)$178,000
• E)$196,000

Explain the concept and impact of span of control on organizational efficiency.

Determine the importance of a clear line of authority and chain of command in organizations.

Identify trends in organizational design, including the shift towards flatter structures and decentralization.

Understand the functions and contents of an organizational chart and its limitations.

---

Definitions:

Stakeholders

The groups of people affected by a firm’s decisions.

Ownership Interest

Refers to the legal rights and claims an individual or entity has over a property or asset.

Ethical Reasoning

The process of evaluating what is right or wrong in a moral sense and making decisions based on ethical principles.

Relevant Stakeholders

Individuals or groups who may be affected by or have an interest in a particular decision or action within a business or project.