A Stand-Alone Capital Project Has the Following Cash Flows $\begin{array}{lll}\text { Year } & 0 &{1-5}\\\text { CashFlow } & (\$ 100,000) &{\$ 28,000}\end{array}$

question 4

Multiple Choice

A stand-alone capital project has the following cash flows. $\begin{array}{lll}\text { Year } & 0 &{1-5}\\\text { CashFlow } & (\$ 100,000) &{\$ 28,000}\end{array}$ What is its NPV if the cost of capital is 10%?

• A) $106,142
• B) ($6,142)
• C) $934
• D) $6,142

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Definitions:

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Vertical Financial Statement Analysis

The examination of a company's financial statements to understand the relationships between individual items and the total, usually expressed as a percentage.

Applied

Refers to a concept or method that has been put into practice or use.

Horizontal Financial Statement Analysis

A method of evaluating financial statements to determine their performance over a period by comparing historical figures.