What Effect Is Likely at the End of the Life

question 66

Multiple Choice

What effect is likely at the end of the life of a project that required a $20,000 investment in net working capital?

• A) The $20,000 must now be paid by the firm.
• B) The firm receives a $20,000 cash inflow.
• C) Taxable income is reduced by $20,000.
• D) No effects are expected because the $20,000 is now a sunk cost.

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Definitions:

HIV

Human Immunodeficiency Virus, a virus that attacks the immune system and can lead to AIDS if not treated.

Market Economy

An economic system in which production and prices are determined by unrestricted competition between privately owned businesses.

Cash Capital

The amount of liquid assets or cash that a company or individual has available for immediate use or investment purposes.

Internal Networks

Connections or systems within a specific organization or structure that facilitate communication and information exchange among its parts.