(Appendix 13A)The Following Data Pertain to an Investment in Equipment

question 131

Multiple Choice

(Appendix 13A) The following data pertain to an investment in equipment:
At the completion of the project,the working capital will be released for use elsewhere.What is the net present value of the project,using a discount rate of 10%? (Ignore income taxes in this problem. ) (Do not round your intermediate calculations and round the final answer to the nearest whole dollar. )

• A) $603.
• B) $126.
• C) ($1,729).
• D) ($517).

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Definitions:

Total Revenue

The total amount of money generated by a firm or entity from its business activities, calculated by multiplying the price by the quantity sold.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as materials and labor.

Profitable

Generating revenue that exceeds the expenses, costs, and taxes needed to sustain the activity.

Average Total Cost

The cost per unit of output, calculated by dividing the overall production costs by the number of units produced.