-Consider the Table Above, Which Summarizes Monthly Construction Draws and

question 13

Multiple Choice

$$\begin{array} { c r c } \text { Month } & \begin{array} { r } \text { Canstructian } \\\text { Draw }\end{array} & \begin{array} { c } \text { Sales } \\\text { Revenue }\end{array} \\1 & \$ 200,000 & \\2 & 150,000 & \\3 & 75,000 & \\4 & 25,000 & \$ 600,000 \\\text { } & & \\\text { Total } & \$ 450,000 & \$ 600,000 \\\text { Present value @ 12\% } & \$ 441,883 & \$ 576,588 \\\end{array}$$
-Consider the table above, which summarizes monthly construction draws and sales revenues. What is the percent of lot sales revenue that needs to be used to repay the loan?

• A) 4.0%
• B) 75.0%
• C) 76.6%
• D) 33.3%

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Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments compatible with the firm's goal of wealth maximization.

Straight-Line Depreciation

Involves evenly spreading the expense of an asset over its estimated useful life.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the organization's goal of maximizing shareholder value.

Straight-Line Depreciation

A process for breaking down the expenditure of a solid asset throughout its useful life in identical yearly quotas.