(Ignore Income Taxes in This Problem

question 135

Multiple Choice

(Ignore income taxes in this problem.) The management of Gimenez Corporation is investigating an investment in equipment that would have a useful life of 7 years. The company uses a discount rate of 17% in its capital budgeting. Good estimates are available for the initial investment and the annual cash operating outflows, but not for the annual cash inflows and the salvage value of the equipment. The net present value of the initial investment and the annual cash outflows is -$274,265.
-Ignoring any salvage value,to the nearest whole dollar how large would the annual cash inflow have to be to make the investment in the equipment financially attractive?

• A)$39,181
• B)$274,265
• C)$46,625
• D)$69,930

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Definitions:

Saltatory Conduction

The jumping of action potentials from node to node along a myelinated neuron, allowing for faster neural transmission.

Gray Matter

Brain tissue comprising neuron cell bodies, dendrites, and unmyelinated axons, involved in muscle control and sensory perception.

White Matter

Tissue in the brain and spinal cord made up of nerve fibers, which is responsible for transmitting signals between different areas of the central nervous system.

Myelinated Axons

Axons that are covered by a fatty sheath called myelin, which increases the speed of electrical impulses along nerve cells.