The XYZ Company Is Evaluating a Capital Budgeting Proposal for the Current

question 82

Essay

The XYZ Company is evaluating a capital budgeting proposal for the current year.The initial investment would be $50,000.It would be depreciated on a straight-line basis over five years with no salvage value.The before-tax annual cash inflow due to this investment is $5,000,and the income tax rate is 40 percent paid in the same year as incurred.The desired after-tax rate of return is 15 percent.All cash flows occur at year-end.
What is the net present value of XYZ's capital-budgeting proposal? Should the proposal be accepted?

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Definitions:

Gene Expression

The method through which the data encoded within a gene guides the construction of a protein molecule.

Epigenetic Mark

Modifications to the DNA or associated proteins, other than changes in the DNA sequence, that affect gene activity and expression.

Proteins Coded

Refers to the proteins that are synthesized in a cell as dictated by the nucleotide sequences of the cell’s genes.

Human Genome

The complete set of nucleic acid sequences for humans, stored as DNA within the 23 chromosome pairs in the nucleus of each cell.