A Project Requires an Initial Investment in Equipment of $90,000

question 12

Multiple Choice

A project requires an initial investment in equipment of $90,000 and then requires an initial investment in working capital of $10,000 (at t = 0) .You expect the project to produce sales revenue of $120,000 per year for three years.You estimate manufacturing costs at 60% of revenues.(Assume all revenues and costs occur at year-end,i.e.,t = 1,t = 2,and t = 3.) The equipment depreciates using straight-line depreciation over three years.At the end of the project,the firm can sell the equipment for $10,000 and also recover the investment in net working capital.The corporate tax rate is 30% and the cost of capital is 12%.
Calculate the NPV of the project:

• A)$14,418.
• B)$8,443.
• C)$-2,735.
• D)$12,873.

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Understand the Attraction-Selection-Attrition (ASA) theory and its implications for organizational culture and staffing.

Recognize the stages of organizational socialization and their importance in employee adjustment.

Identify the role of accurate information exchange during the pre-employment stage in shaping job candidates' expectations and organizational fit.

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Definitions:

Behavior Therapy

A type of psychotherapy that focuses on changing undesirable behaviors through conditioning and other learning principles.

Behavioral Conditioning Therapies

Psychiatric treatment approaches that use conditioning techniques to change undesirable behaviors into more desirable ones through reinforcement or punishment.

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Intense, irrational fears of specific items, creatures, or situations that pose little or no real danger.