What is the approximate net present value

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Questions -

Q1) The minimum required rate of return for a project is the:

A. annual rate of return.

B. accounting rate of return.

C. cost of capital.

D. internal rate of return.

Q2) The formula for budgeted direct materials purchases is:

A. Budgeted production units + Ending direct materials inventory - Beginning direct materials inventory

B. Budgeted production units + Beginning direct materials inventory - Ending direct materials inventory

C. Materials needed for production + Ending direct materials inventory - Beginning direct materials inventory

D. Materials needed for production + Beginning direct materials inventory - Ending direct materials inventory

Q3) Hiawatha Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $200,000. The equipment will have an initial cost of $900,000 and have a 6 year life. There is no salvage value for the equipment. If the cost of capital is 7%, what is the approximate net present value? Ignore income taxes.

A. $53,300

B. $24,580

C. $900,000

D. $300,000

Reference no: EM132613656

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