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(Present Value Tables Are Required

question 72

Multiple Choice

(Present value tables are required.) Mansfield Motors is evaluating a capital investment opportunity.This project would require an initial investment of $30,000 to purchase one machine and $10,000 to purchase the other machine (both machines are required) .The project equipment will have a residual value at the end of its life of $3,000.The useful life of the equipment is 5 years.The new project is expected to generate additional net cash inflows of $12,000 per year for each of the five years.Mansfield Motors' required rate of return is 14%.The net present value of this project is closest to:

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Definitions:

Macroeconomic Theory

Macroeconomic theory involves the study and analysis of economy-wide phenomena, including inflation, national income, and unemployment.

Political Philosophy

A branch of philosophy focused on discussing and analyzing various views about who should rule, the nature of just governance, and the role of citizens in a state.

Monetarist

An economist who believes that variations in the money supply are the main source of economic fluctuations.

Nominal Rate

The interest rate before adjustments for inflation, as opposed to the real interest rate which is adjusted.