Bedolla Corporation is considering a capital budgeting project that would require investing $160,000 in equipment with an expected life of 4 years and zero salvage value. Annual incremental sales would be $430,000 and annual incremental cash operating expenses would be $310,000. The company's income tax rate is 30% and its after-tax discount rate is 8%. The company uses straight-line depreciation. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.The income tax expense in year 2 is:
A. $24,000
B. $129,000
C. $93,000
D. $12,000
Answer: A
You might also like to view...
To justify the subsidies it has received from European governments, The Airbus Company has used all of the following arguments EXCEPT
a. its subsidies have prevented U.S. aircraft firms from holding a world-wide monopoly. b. U.S. aircraft firms have benefited from military-sponsored programs of the U.S. government. c. Airbus' subsidies were totally repaid as the firm realized profits on its aircraft sales. d. without subsidies to Airbus, Europe would be dependent on the United States as a supplier of aircrafts.
Delaware Inc incurred the following costs in October, 2014, for producing 5,000 good units of personalized photo frames. Direct materials $ 15,000 Direct labor 10,000 Overhead applied 13,500 The company sold 4,500 units. Determine the product unit cost of photo frames
A) $8.56 B) $7.70 C) $5.00 D) $5.56
A common myth about entrepreneurship is that "Any entrepreneur with a good idea can ________ to fund his/her business."
A. use a skunkworks B. go public C. use formal control systems D. start a franchise E. raise venture capital
Which amount should be reported as cash on the balance sheet?
A. The beginning cash balance per the bank statement. B. The up-to-date ending cash balance per the bank reconciliation. C. The ending cash balance per the books. D. The ending cash balance per the bank statement.