The Finney Company Is Reviewing the Possibility of Remodelling One

question 111

Multiple Choice

The Finney Company is reviewing the possibility of remodelling one of its showrooms and buying some new equipment to improve sales operations. The remodelling would cost $120,000 now, and the useful life of the project is ten years. Additional working capital needed immediately for this project would be $30,000; the working capital would be released for use elsewhere at the end of the ten-year period. The equipment and other materials used in the project would have a salvage value of $10,000 in ten years. Finney's discount rate is 16%. (Ignore income taxes in this problem.)
-What would be the immediate cash outflow required for this project?

• A) ($150,000).
• B) ($130,000).
• C) ($120,000).
• D) ($90,000).

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Definitions:

Birth Order

The chronological order of sibling births in a family, which is thought to influence personality and behavioral traits.

Genetic Makeup

Genetic makeup refers to the set of genes that an organism inherits from its parents, which codes for its physical and some behavioral traits.

Parental Attitudes

Refers to the feelings, beliefs, and behaviors that parents have towards their offspring which significantly impact their development.

Style of Life

An individual's unique set of behaviors, attitudes, and habits that are developed to navigate life and achieve personal goals.