(Ignore Income Taxes in This Problem

question 59

Multiple Choice

(Ignore income taxes in this problem.) Gillaspie, Inc., is considering the purchase of a machine that would cost $300,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $51,000. The machine would reduce labor and other costs by $86,000 per year. Additional working capital of $10,000 would be needed immediately. All of this working capital would be recovered at the end of the life of the machine. The company requires a minimum pretax return of 13% on all investment projects.
-The combined present value of the working capital needed at the beginning of the project and the working capital released at the end of the project is closest to:

• A)-$8,420
• B)$25,170
• C)-$4,570
• D)$0

---

Definitions:

Intergenerational Abuse

Patterns of abusive behavior that are passed down from one generation to the next within a family or community.

Stereotype

A widely held but fixed and oversimplified image or idea of a particular type of person or thing, often based on limited information or false assumptions.

Requirement of Mourning

The social, emotional, or cultural expectations placed on individuals to grieve or show sorrow after a loss.

Predictable Stages

Predictable stages refer to the recognized phases or steps that occur in a specific sequence within processes, developments, or life cycles, which can be anticipated.