Garden-Grow Products Is Considering a New Investment Whose Data Are

question 28

Multiple Choice

Garden-Grow Products is considering a new investment whose data are shown below.The equipment would be depreciated on a straight-line basis over the project's 3-year life, would have a zero salvage value, and would require some additional working capital that would be recovered at the end of the project's life.Revenues and other operating costs are expected to be constant over the project's life.What is the project's NPV? (Hint: Cash flows are constant in Years 1 to 3.)

• A) $23, 852
• B) $25, 045
• C) $26, 297
• D) $27, 612
• E) $28, 993

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Definitions:

Open System

An entity or process that interacts with its environment by exchanging information, material, or energy.

Outputs

The ultimate outputs, whether products, services or outcomes, produced by a system, process, or organization.

Supplies

Materials, equipment, or other items required for the operation of a business or the completion of a task.

Closed Systems

Systems that do not interact with the environment outside of themselves, limiting the exchange of matter or energy.