Wrangler Company Is Considering a Five-Year Project That Requires a Typical

question 65

Multiple Choice

Wrangler Company is considering a five-year project that requires a typical investment in working capital, in this case, $100,000. Consider the following statements about this situation:
I. Wrangler should include a $100,000 outflow that occurs at time 0 in a discounted-cash-flow analysis.
II. Wrangler should include separate $100,000 outflows in each year of the project's five-year life.
III. Wrangler should include a $100,000 recovery of its working-capital investment in year 5 of a discounted-cash-flow analysis.
Which of the above statements is (are) correct?

• A) I only.
• B) II only.
• C) III only.
• D) I and II.
• E) I and III.

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Definitions:

Hormone

Chemical substances produced in the body that regulate and control the activity of certain cells or organs, essential for every function of the body.

Bloodstream

The system of blood vessels (arteries, veins, and capillaries) through which blood flows within an organism, delivering oxygen and nutrients to tissues and removing waste products.

FIFRA

The Federal Insecticide, Fungicide, and Rodenticide Act, which is a United States law that sets up the basic U.S. system of pesticide regulation to protect applicators, consumers, and the environment.

Herbicides

Chemical substances used to control or eliminate unwanted vegetation, especially weeds, in agricultural or landscape maintenance.