Given the Following Information,calculate the NPV of a Proposed Project

question 191

Multiple Choice

Given the following information,calculate the NPV of a proposed project: Cost = $4,000;estimated life = 3 years;initial decrease in accounts receivable = $1000,which must be restored at the end of the project's life;estimated salvage value = $1,000;net income before taxes and depreciation = $2,000 per year;method of depreciation = MACRS;tax rate = 40 percent;required rate of return = 18 percent.

• A) $1,137
• B) −$151
• C) $137
• D) $804
• E) $544

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Definitions:

Ionic Bond

A chemical bond formed between two ions with opposite charges through the transfer of electrons.

Covalent Bond

A chemical bond formed by the sharing of one or more pairs of electrons between atoms to achieve stability.

Biological Molecules

Biological molecules are the essential substances that are the building blocks of living organisms, including proteins, nucleic acids, carbohydrates, and lipids.

Stabilizes

Refers to making something more steady or firmly fixed in place, or making a chemical compound resistant to change.