Isabelle Is Reviewing a Project with Projected Sales of 1,500

question 55

Multiple Choice

Isabelle is reviewing a project with projected sales of 1,500 units a year,a cash flow of $40 a unit and a 3-year project life.The initial cost of the project is $95,000.The relevant discount rate is 15 percent.She has the option to abandon the project after one year at which time she feels she could sell the project for $60,000.At what level of sales should she be willing to abandon the project?

• A)1,725.00 units
• B)1,882.01 units
• C)966.67 units
• D)922.67 units
• E)1,006.34 units

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Definitions:

Noam Chomsky

A linguistic and cognitive scientist known for his theory of generative grammar and critique of behaviorism.

Behaviorism

A theoretical approach in psychology that studies observable behaviors, emphasizing the role of external factors in shaping behavior and minimizing the importance of innate traits and consciousness.

Linguistics

the scientific study of language and its structure, including the study of morphology, syntax, phonetics, and semantics.

Cognitive Science

An interdisciplinary field drawing on research from cognitive psychology, computer science, philosophy, linguistics, neuroscience, and anthropology. The central issues addressed involve the nature of mind and cognition and how information is acquired, stored, and represented.