We Are Evaluating a Project That Costs $854,000,has a 15-Year

question 21

Multiple Choice

We are evaluating a project that costs $854,000,has a 15-year life,and has no salvage value.Assume that depreciation is straight-line to zero over the life of the project.Sales are projected at 154,000 units per year.Price per unit is $41,variable cost per unit is $20,and fixed costs are $865,102 per year.The tax rate is 33 percent,and we require a 14 percent return on this project.Suppose the projections given for price,quantity,variable costs,and fixed costs are all accurate to within ±14 percent.What is the worst-case NPV?

• A)$984,613
• B)$1,267,008
• C)$1,489,511
• D)$1,782,409
• E)$1,993,870

Differentiate between liquidity ratios, such as the current ratio and quick ratio, and understand their importance.

Analyze sales performance and operational efficiency using turnover ratios and growth percentages.

Understand key financial metrics and their calculations related to working capital management.

Calculate and interpret inventory turnover and understand its implications on business operations.

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Definitions:

Unconscious Determination

The influence of unconscious factors on thoughts, behaviors, and decisions, highlighting the role of hidden mental processes.

Behavior Consequence

The outcome or result of an action, which can either reinforce the behavior or deter it in the future.

Reinforcement

A psychological principle involving the use of rewards or punishments to increase or decrease the likelihood of a particular behavior.

Aversive Event

An unpleasant or undesirable occurrence that can lead to changes in behavior or psychological state.