The Sawyer Company Has $\$ 80,000$ To Invest and Is Considering Two Different Projects

question 48

Multiple Choice

The Sawyer Company has $\$ 80,000$ to invest and is considering two different projects: $\mathrm { X }$ and $\mathrm { Y }$ . The following data are available on the projects:
$\begin{array}{|l|r|r|}\hline & \text { Project X } & \text { Project Y } \\\hline \text { Cost of equipment needed now } & \$ 80,000 & --- \\\hline \text { Working capital requirement } & -- & \$ 80,000 \\\hline \text { Annual cash operating inflows } & \$ 23,000 & \$ 18,000 \\\hline \text { Salvage value in five years } & \$ 6,000 & -- \\\hline\end{array}$
Both projects will have a useful life of five years; at the end of five years, the working capital will be released for use elsewhere. Sawyer's discount rate is $12 \%$ . (Ignore income taxes in this problem.)
- What is the net present value of project X? (Do not round your intermediate calculations and round your final answer to the nearest whole number.)

• A) ($11,708).
• B) $2,910.
• C) $5,283.
• D) $6,314.

---

Definitions:

Phlebotomist

A healthcare professional trained to draw blood for clinical or medical testing, transfusions, donations, or research.

Pathologist

A medical specialist who examines tissues, organs, bodily fluids, and autopsies to diagnose disease and determine cause of death.

American Board of Medical Specialties

An organization that oversees the certification and standards for physicians in various medical specialties and subspecialties in the United States.

Medical Assisting Practitioners

Healthcare professionals who perform administrative and clinical tasks to support the work of medical doctors and other health professionals.