A Company Needs an Increase in Working Capital of $20,000

question 112

Multiple Choice

A company needs an increase in working capital of $20,000 in a project that will last 4 years. The company's tax rate is 30% and its after-tax discount rate is 10%. The present value of the release of the working capital at the end of the project is closest to:

• A)$6,000
• B)$13,660
• C)$9,562
• D)$14,000

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Definitions:

Connective Tissue

A type of body tissue that supports, connects, or separates different types of tissues and organs in the body.

Subcutaneous

Situated or applied under the skin.

Dermis

The thick layer of living tissue below the epidermis that forms the true skin, containing blood capillaries, nerve endings, sweat glands, and hair follicles.

Epidermis

The outer protective layer of the skin that produces new skin cells.