A Project Is Expected to Create Operating Cash Flows of $24,500

question 47

Multiple Choice

A project is expected to create operating cash flows of $24,500 a year for three years.The initial cost of the fixed assets is $55,000.These assets will be worthless at the end of the project.An additional $4,000 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 percent?

• A)$4,933.13
• B)$1,954.17
• C)$1,927.87
• D)$4,208.11
• E)$5,927.87

Understand the concepts of full employment and full production within an economy.

Recognize the impact and causes of employment discrimination.

Describe the principle of economizing and its necessity.

Differentiate between the terms full employment and full production and their indicators.

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Definitions:

Machine Hours

A measure of the total time that machines are operating during a specific period.

Applied Overhead

The segment of manufacturing overhead expenses assigned to each production unit according to a pre-established rate.

Factory Overhead

All indirect costs associated with manufacturing, including utilities, maintenance, and salaries of non-direct labor.

Machine Hours

A measure of the total time that machines are operated over a specific period, often used for allocating manufacturing overhead costs to products.