Use the Information Below to Answer the Following Questions -When a New Investment Requires an Increase in Working Capital

question 23

Multiple Choice

Use the information below to answer the following questions.
Han Ltd supplies chilli paste to large supermarket chains. The company is currently considering scrapping the old processor and investing in a new processor. Information about the investment is as follows: $$\begin{array} { l r } \text { Initial investment in processor } & \$ 105,000 \\\text { Operating cash flows over next 5 years: } & \\\quad \text { Cash receipts } & \$ 80,000 \\\quad \text { Cash payments } & \$ 40,000 \\\text { Residual value of processor in 5 years } & \$ 5,000 \\\text { Required rate of return } & 8 \% \\\text { Depreciation per antum } & \$ 20,000\end{array}$$
-When a new investment requires an increase in working capital (e.g., accounts receivable, inventory) the analysis should incorporate this by:

• A)recording a cash outflow in Year 0 and a cash inflow at the end of the project.
• B)recording a cash inflow at the end of the project.
• C)evenly dividing the amount of working capital as a cash outflow for each year of the investment.
• D)doing nothing as there is a nil impact on cash flows.

Understand the basis and applications of adaptive immunity in disease control and prevention.

Understand the role of opportunistic infections in the progression of AIDS.

Differentiate between innate and adaptive immunity and their roles in protection against pathogens.

Recognize the types of cells targeted and infected by HIV.

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Definitions:

Excess Capacity

A situation where a firm is operating below its maximum output level, indicating that it has available resources that are not being fully utilized.

Economic Profits

The offset between gross income and total liabilities, embracing both visible and hidden expenses.

Excess Capacity

The situation in which a firm operates below its maximum potential production level, indicating underutilization of resources.

Monopolistic Competition

A market scenario characterized by the presence of many companies offering differentiated products, permitting some level of pricing power.