Julio Company purchased a $200,000 machine that has a four-year life and no salvage value. The company uses straight-line depreciation on all asset acquisitions and is subject to a 30% tax rate. The proper cash flow to show in a discounted-cash-flow analysis as occurring at time 0 would be: (Click here to view PV table.)
A. $(200,000).
B. $50,000.
C. $(140,000).
D. $15,000.
E. $(35,000).
Answer: A
You might also like to view...
All of the following are ethical values a firm should consider when developing and/or modifying a code of ethics except
a. Integrity b. Justice c. Reciprocity d. Utility
If a company is comparing this year's financial performance to last year's financial performance, it is using horizontal analysis.
Answer the following statement true (T) or false (F)
Bridge Company makes special equipment used in cell towers
Each unit sells for $410. Bridge uses just-in-time inventory procedures; it produces and sells 12,000 units per year. It has provided the following income statement data: Traditional Format Contribution Margin Format Sales revenue $4,920,000 Sales revenue $4,920,000 Cost of goods sold 2,900,000 Variable costs: Gross profit 2,020,000 Manufacturing 1,000,000 Selling & admin. expenses 650,000 Selling & admin. 400,000 Contribution margin 3,520,000 Fixed costs: Manufacturing 1,900,000 Selling & admin. 250,000 Operating income $1,370,000 Operating income $1,370,000 A foreign company has offered to buy 100 units for a reduced sales price of $300 per unit. The marketing manager says the sale will have no negative impact the company's regular sales. The sales manager says that this sale will not require any additional selling and administrative costs, as it is a one-time deal. The production manager reports that there is plenty of excess capacity to accommodate the deal without requiring any additional fixed costs. If Bridge accepts the deal, how will this impact operating income? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A) Operating income will increase by $29,917. B) Operating income will decrease by $29,917. C) Operating income will increase by $30,000. D) Operating income will decrease by $30,000.
Managers satisfied with their current market share and profits sometimes adopt what can be thought of as "don't-rock-the-pricing-boat objectives." These are also referred to as
A. market share maximization objectives. B. target return objectives. C. status quo objectives. D. profit maximization objectives. E. sales-oriented objectives.