A Project Is Expected to Create Operating Cash Flows of $22,500

question 63

Multiple Choice

A project is expected to create operating cash flows of $22,500 a year for three years. The initial cost of the fixed assets is $50,000. These assets will be worthless at the end of the project. An additional $3,000 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 10%?

• A) $2,208.11
• B) $2,954.17
• C) $4,306.09
• D) $5,208.11
• E) $5,954.17

---

Definitions:

Assembly

The process of putting together individual pieces to create a complete product or compiling and linking program code into a usable software program.

Finishing

The process of completing or giving the final touches to a product, workpiece, or surface to achieve the desired appearance or functionality.

Standard Deviation

A statistic that measures the dispersion of a dataset relative to its mean, indicating how spread out the data points are.

Emergency Calls

Phone calls made to emergency services, such as police, fire brigade, or medical services, requesting immediate assistance.