DSSS Corporation DSSS Corporation Is Considering a New Project to Manufacture Widgets

question 32

Multiple Choice

DSSS Corporation
DSSS Corporation is considering a new project to manufacture widgets. The cost of the manufacturing equipment is $125,000. The cost of shipping and installation is an additional $10,000. The asset will fall into the 3-year MACRS class. The year 1- 4 MACRS percentages are 33.33%, 44.45%, 14.81%, and 7.41%, respectively. Sales are expected to be $225,000 per year. Cost of goods sold will be 60% of sales. The project will require an increase in net working capital of $10,000. At the end of three years, DSSS plans on ending the project and selling the manufacturing equipment for $25,000. The marginal tax rate is 40% and DSSS Corporation's appropriate discount rate is 15%.
-Refer to DSSS Corporation.What is the IRR of the project?

• A) 22.79%
• B) -10.01%
• C) 19.47%
• D) 27.36%

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Definitions:

Visual-Form Agnosia

An impairment in recognizing visual objects, despite the ability to see and describe their details, due to damage in certain brain areas.

Visually Guided

Behavior or movement directed by visual cues, enabling an organism to move or act in response to what it sees.

Conscious Act

A deliberate action performed with awareness, reflecting the capacity of individuals to apply intention and reflection to their behaviors.

Nonvisually Guided

Actions or behaviors that are executed without the reliance on visual input, often depending on other sensory feedback or pre-learned spatial information.