Spot-Free Car Wash Is Considering a New Project Whose Data

question 32

Multiple Choice

Spot-Free Car Wash is considering a new project whose data are shown below.The equipment to be used has a 3-year tax life,would be depreciated on a straight-line basis over the project's 3-year life,and would have a zero salvage value after Year 3.No new working capital would be required.Revenues and other operating costs will be constant over the project's life,and this is just one of the firm's many projects,so any losses on it can be used to offset profits in other units.If the number of cars washed declined by 40% from the expected level,by how much would the project's NPV decline? (Hint: Note that cash flows are constant at the Year 1 level,whatever that level is.) $$\begin{array} { l r } \text { WACC } & 10.0 \% \\\text { Net investment cost (depreciable basis) } & \$ 60,000 \\\text { Number of cars washed } & 2,800 \\\text { Average price per car } & \$ 25.00 \\\text { Fixed op. cost (excl. deprec.) } & \$ 10,000 \\\text { Variable op. costunit (i.e., VC per car washed) } & \$ 5.375 \\\text { Annual depreciation } & \$ 20,000 \\\text { Tax rate } & 35.0 \%\end{array}$$

• A)$28,939
• B)$30,462
• C)$32,066
• D)$33,753
• E)$35,530

Recognize the ethical obligations researchers have towards participants when conducting experiments, especially concerning sensitive information.

Grasp the importance of ensuring participant privacy and how information is recorded and distributed.

Understand measures of variability and their significance in psychological research.

Recognize the importance of random assignment in research and its impact on the validity of study conclusions.

---

Definitions:

Photoreceptors

Specialized cells or organs in organisms that respond to light, enabling vision or other light-based sensory processes.

Photopigment Rhodopsin

A light-sensitive pigment found in the rod cells of the retina, crucial for low-light vision.

Color Vision

The ability of the visual system to distinguish objects based on the wavelengths of the light they reflect, emit, or transmit.

Chemoreceptors

Sensory receptor cells or organs specialized in detecting chemical substances in the environment or the body.