You Are Evaluating a Project for Your Company

question 75

Multiple Choice

You are evaluating a project for your company. You estimate the sales price to be $10 per unit and sales volume to be 3,000 units in year 1; 10,000 units in year 2; and 1,000 units in year 3. The project has a three-year life. Variable costs amount to $3 per unit and fixed costs are $25,000 per year. The project requires an initial investment of $50,000 in assets that will be depreciated straight-line to zero over the three-year project life. The actual market value of these assets at the end of year 3 is expected to be $10,000. NWC requirements at the beginning of each year will be approximately 25 percent of the projected sales during the coming year. The tax rate is 34 percent and the required return on the project is 15 percent. What is the operating cash flow for the project in year 2?

• A)$18,700
• B)$18,867
• C)$35,367
• D)$40,317

Analyze how efficiency wages influence labor demand, labor supply, and unemployment.

Evaluate the impact of technological advancements on monitoring workers and its effect on efficiency wages.

Distinguish between market-clearing wages and efficiency wages.

Identify the reasons why companies might prefer to pay efficiency wages.

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Definitions:

Driver

Software that allows an operating system to communicate with hardware or devices, enabling them to function together seamlessly.

Mouse Operations

Actions or commands executed using a computer mouse, including clicking, double-clicking, dragging, and scrolling.

Right Mouse Button

The button on the right side of a mouse that often opens contextual menus or provides additional interaction options within software applications.

Mouse Operations

Actions performed with a computer mouse, including clicking, double-clicking, dragging, and scrolling.