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:

Two Factor Theory

A theory that explains emotions and their arousal through a combination of physiological arousal and cognitive interpretation of that arousal.

Arousal

A state characterized by both physical and mental responsiveness or awareness, commonly linked with heightened alertness and an accelerated heartbeat.

Lust

An intense and passionate desire, often used in the context of sexual attraction.

Interdependence Theory

A psychological framework suggesting that the quality of relationships depends on the outcomes individuals perceive they could achieve through those relationships versus alone.