California Hideaways Is Considering a New Project Whose Data Are

question 55

Multiple Choice

California Hideaways is considering a new project whose data are shown below.The equipment has a 4-year project life.This equipment falls into class 43 with a CCA rate of 30% and would have zero salvage value.No new working capital would be required.Revenues and cash operating costs are expected to be constant over the project's 4-year life.What is the project's NPV? (Hint: Cash flows are constant in Years 1 to 4.) $\begin{array}{lr}\text { WACC } & 10.0 \% \\\text { Net investment cost } & \$ 65,000 \\\text { Sales revenues, each year } & \$ 60,000 \\\text { Cash operating costs } & \$ 25,000 \\\text { Tax rate } & 35.0 \%\end{array}$

• A)$28,499
• B)$23,402
• C)$19,417
• D)$16,284

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Definitions:

State of Flow

A mental state where a person performing an activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment in the process of the activity.

Psychological Contact

A concept in psychology that refers to the perception of interaction or connection between individuals, often foundational in therapeutic relationships.

Employee Engagement

The emotional commitment an employee has to their organization and its goals, influencing their willingness to contribute to organizational success.

Strengths-based Leadership

A leadership style that focuses on identifying, optimizing, and leveraging the strengths of team members rather than improving their weaknesses.