Given the Following Information,calculate the NPV of a Proposed Project

question 191

Multiple Choice

Given the following information,calculate the NPV of a proposed project: Cost = $4,000;estimated life = 3 years;initial decrease in accounts receivable = $1000,which must be restored at the end of the project's life;estimated salvage value = $1,000;net income before taxes and depreciation = $2,000 per year;method of depreciation = MACRS;tax rate = 40 percent;required rate of return = 18 percent.

• A) $1,137
• B) −$151
• C) $137
• D) $804
• E) $544

---

Definitions:

New Program

Initiative or set of organized activities introduced to meet certain objectives or address specific needs.

Era of Downsizing

A period characterized by a significant reduction in the workforce of organizations to cut costs and improve efficiency.

Limited Power

A condition where an entity's authority or capacity to act and influence is restricted by external factors or internal regulations.

Cognitive Ability

The mental capacity to reason, remember, understand, solve problems, and make decisions.