Raven Company is considering replacing equipment which originally cost $500,000 and which has $460,000 accumulated depreciation to date. A new machine will cost $790,000. What is the sunk cost in this situation?
A) $330,000
B) $500,000
C) $40,000
D) $290,000
C
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Probably the most ambitious and successful labor-management partnership in the U.S. is the ______________ Labor-Management Partnership.
Fill in the blank(s) with the appropriate word(s).
Nick's Wholesale Office Supplies prefers to handle its accounts receivable itself, but it also needs to use them to facilitate short-term borrowing. What can Nick's do?
A. Use floor planning. B. Purge its accounts receivable. C. Pledge them as collateral. D. Force all customers to pay now. E. Sell commercial paper.
Eastern Inc. purchases a machine for $70,000. This machine qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%
The firm has a tax rate of 40%. If the machine is sold at the end of two years for $50,000, what is the cash flow from disposal? A) $50,000 B) $43,440 C) $39,875 D) $33,600
K&L Chemicals is a U.S.-based manufacturer of agricultural chemicals. K&L recently sold two thousand gallons of its most toxic pesticide to Sahara Traders, a company headquartered in the North African desert nation of Chad. Sahara Traders refused to
disclose the use that it intended to make of the product and paid cash upon its delivery. Sahara ultimately shipped the pesticide to the North Korean government for use in its chemical weapons program. Is K&L liable for the ultimate transshipment of its pesticide to North Korea? Please explain your answer.