Joshua Industries Is Considering a New Project with Revenue of $478,000

question 14

Multiple Choice

Joshua Industries is considering a new project with revenue of $478,000 for the indefinite future.Cash costs are 68 percent of the revenue.The initial cost of the investment is $685,000.The tax rate is 21 percent and the unlevered cost of equity is 14.2 percent.The firm is financing $200,000 of the project cost with debt.What is the adjusted present value of the project?

• A)$202,429
• B)$198,311
• C)$207,975
• D)$232,408
• E)$225,941

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Definitions:

Sample Sizes

The number of observations or datapoints collected in a sample, which can affect the accuracy and reliability of statistical analyses.

Rejection Region

The range of values for which the null hypothesis is not considered probable and therefore rejected in hypothesis testing.

Population Variances

A measure of the distribution of data points in a population, indicating how spread out the data values are from the mean.

Normally Distributed

Describes a data set that follows a normal distribution, where most measurements are concentrated around the mean, creating a bell curve shape.