Rollans Corporation has provided the following information concerning a capital budgeting project: After-tax discount rate 14%Tax rate 30%Expected life of the project 4 Investment required in equipment$200,000 Salvage value of equipment$0 Annual sales$430,000 Annual cash operating expenses$300,000 The company uses straight-line depreciation on all equipment. 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 net present value of the entire project is closest to:See separate Exhibit 13B-1, to determine the appropriate discount factor(s) using the tables provided.
A. $118,230
B. $308,778
C. $224,000
D. $108,778
Answer: D
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In deciding to decide about a problem or opportunity, a manager should evaluate the importance of the situation, the credibility of the information, and
A. the equitability of the outcomes. B. the availability of heuristics. C. the urgency of the situation. D. the cost of the solution. E. the ethics of making no change.
The Society for Human Resource Management and the Ethics Resource Center found the most common reason an employee was pressured to act unethically was ______.
a. schedule stress b. wanting to help the team c. directives from a boss d. need for personal gain
Kelly often tells sellers that her budget will not allow her to pay the price they are asking. What is the most effective way a seller could counter that claim?
A) offering to reduce the price through unbundling B) telling her to request a larger budget from her manager C) offering her the product for what she says she can spend D) asking to see proof of the limit of her budget E) convincing her of the benefits of the product
Why should the discount rate not be adjusted for political risk?
What will be an ideal response?