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

question 37

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 percent 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 percent and the cost of capital is 15 percent.Cash flows from the project are

• A)CF₀: -90,000; CF₁: 12,600; CF₂: 12,600; CF₃: 29,600.
• B)CF₀: -100,000; CF₁: 42,600; CF₂: 42,600; CF₃: 59,600.
• C)CF₀: -100,000; CF₁: 42,600; CF₂: 42,600; CF₃: 42,600.
• D)CF₀: -100,000; CF₁: 42,600; CF₂: 42,600; CF₃: 49,600.

Identify the effects of managerial behavior on workplace stress and employee well-being.

Recognize the relationship between personality traits and the handling of work-family tensions.

Understand the trickle-down effect of negative behaviors in the workplace hierarchy.

Recognize the factors contributing to employee burnout and engagement.

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Definitions:

Deception

The act of misleading or deceiving someone by concealing or misrepresenting the truth.

Informed Consent

A legal and ethical principle requiring individuals to be fully informed about and consent to procedures or activities affecting them.

Necessary

Something that is required or essential for a particular purpose, action, or outcome.

Harmful

Causing or capable of causing damage, injury, or negative effects to something or someone.