C & K Inc Purchased a Delivery Van Costing $65,000

question 21

Multiple Choice

C & K Inc. purchased a delivery van costing $65,000. Annual operating cash inflows are expected to be $18,000 each year for six years. At the end of the asset's life, the salvage value is expected to be $5,000. Assuming C & K's cost of capital is 15 percent, what is the asset's net present value? (ignore income taxes)

• A) $3,121
• B) $22,044
• C) $5,283
• D) $959

Understand the use of model systems in studying chemical reactions and their relevance to human biology.

Grasp the concept of forming and testing hypotheses in scientific investigations, including the use of statistical analysis.

Comprehend the application and importance of the scientific method in biological research.

Recognize the role of controlled experiments in isolating variables and testing predictions.

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Definitions:

Free Cash Flow

The amount of cash generated by a company after accounting for operating expenses and capital expenditures.

Operating Activities

Activities that relate directly to the operation of a company, including manufacturing, selling, marketing, and administrative functions.

Income Taxes

Government-imposed charges on the income earned by individuals and businesses, calculated according to tax laws.

Capital Expenditures

Expenses for acquiring physical assets or making upgrades to existing ones, which are expected to provide benefits over a long period.