The Following Data Pertain to an Investment Proposal $$\begin{array} { | l | l |} \hline \text { Life of the Project } & \text { 10years } \\\hline\end{array}$$

question 113

Multiple Choice

The following data pertain to an investment proposal:
$\begin{array}{|l|r|}\hline \text { Investment in the Project (equipment) } & \$ 14,000 \\\hline \text { Net Annual Cash Inflows Promised } & \$ 2,800 \\\hline \text { Working Capital Required } & \$ 5,000 \\\hline \text { Salvage Value of the Equipment } & \$ 1,000 \\\hline\end{array}$
$$\begin{array} { | l | l |} \hline \text { Life of the Project } & \text { 10years } \\\hline\end{array}$$
The working capital would be released for use elsewhere when the project is completed.What is the net present value of the project,using a discount rate of 8%? (Ignore income taxes in this problem.) (Do not round your intermediate calculations and round the final answer to the nearest whole dollar.)

• A) ($251).
• B) $251.
• C) $2,567.
• D) $5,251.

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Definitions:

Engine

A machine designed to convert one form of energy into mechanical energy.

Lift

In the context of business and marketing, it refers to an increase or improvement in a certain metric such as sales or engagement resulting from a specific action or campaign.

Coal Mine

A location where coal is extracted from the earth through mining processes.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.