Boynes Corporation is considering a capital budgeting project that would require investing $200,000 in equipment with an expected life of 4 years and zero salvage value. Annual incremental sales would be $490,000 and annual incremental cash operating expenses would be $330,000. The project would also require an immediate investment in working capital of $10,000 which would be released for use elsewhere at the end of the project. The project would also require a one-time renovation cost of $70,000 in year 3. The company's income tax rate is 30% and its after-tax discount rate is 14%. 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 total
cash flow net of income taxes in year 2 is:
A. $110,000
B. $78,000
C. $160,000
D. $127,000
Answer: D
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During an engagement to review the financial statements of a nonpublic entity, an accountant becomes aware of a material departure from GAAP. If the accountant decides to modify the standard review report because management will not revise the financial statements, the accountant should:
A. disclose the departure from GAAP in a separate paragraph of the report. B. issue an adverse or an "except for" qualified opinion, depending on materiality. C. express negative assurance on the accounting principles that do not conform with GAAP. D. express positive assurance on the accounting principles that conform with GAAP.
Zucchero Sugar, Inc. has six processing departments for refining sugar—Affination, Carbonation, Decolorization, Boiling, Recovery, and Packaging. Conversion costs are added evenly throughout each process. Data from the month of August for the Recovery Department are as follows:
The ending Work-in-Process Inventory is 100% and 85% complete with respect to direct materials and conversion costs, respectively. The weighted-average method is used. How many metric tons of sugar were refined and transferred to the Packaging Department in August?
A) 22,000 metric tons
B) 6000 metric tons
C) 16,000 metric tons
D) 28,000 metric tons
Overhauling a company's cooling system is an example of an extraordinary repair
Indicate whether the statement is true or false
You meet a man who built missiles designed to pierce the enemy and destroy them. You just read the section on Freud and tell the man the missile represents the penis and the destruction it causes is a result of the man’s sexual aggression and propensity to violence due to feelings of sexual inadequacies. What defense mechanism would you say the man is employing?
a. Reaction formation b. Projection c. Repression d. Depression