Columbus Company Is Considering a Project That Requires an Initial

question 116

Essay

Columbus Company is considering a project that requires an initial investment of $400,000.Its incremental cash flows are expected to be $150,000 per year for five years.The project would be depreciated on a straight-line basis over 5 years with no expected salvage value.The company has a stated policy that all projects must return their required investment dollars within the first 75% of the project's life.The company is subject to a 40% income tax rate,and its cost of capital is 10%.
Required:
1)Compute the project's after-tax net cash flows (NCF)by completing the following table: $\begin{array}{|c|c|c|c|c|c|}\hline & \text { Cash } & & \text { Taxable } & \text { Cash Outflow } & \text { After-tax } \\\hline \text { Year } & \text { Inflows } & \text { Depreciation } & \text { Income } & \text { for Taxes } & \text { NCF } \\\hline 1.5 & & & & & \\\hline\end{array}$ 2)Compute the project's net present value by completing the following table.(Round the present value amounts to the nearest whole number. ) $\begin{array}{|c|c|c|c|}\hline & \text { After-tax } & \text { Present Value } & \text { Total } \\\hline \text { Year } & \text { NCF } & \text { Factor } & \text { Present Value } \\\hline 0 & & & \\\hline 1.5 & & & \\\hline\end{array}$ 3)Compute the project's payback period.
4)Should the project be accepted? Why or why not?

Describe the social-cognitive perspective on personality, including the concepts of self-efficacy and reciprocal determinism.

Understand the Big Five personality traits and other trait-based theories of personality.

Explore humanistic perspectives on personality focusing on self-actualization and the role of a positive self-concept.

Recognize how individual differences in personality relate to behavior and interpersonal relationships.

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Definitions:

Price Sensitive

Being affected by changes in the price of goods or services, often referring to consumers whose buying decisions are heavily influenced by price changes.

Price Elasticity

An economic concept that measures how the quantity demanded of a good changes in response to a change in its price.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Elastic

A term often used in economics to describe a situation where the demand for a product or service significantly changes in response to a change in price.