Prudencio Corporation has provided the following information concerning a capital budgeting project: After-tax discount rate 13%Tax rate 30%Expected life of the project 4 Investment required in equipment$160,000 Salvage value of equipment$0 Annual sales$400,000 Annual cash operating expenses$290,000 One-time renovation expense in year 3$40,000?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. $139,420
B. $245,282
C. $85,282
D. $168,000
Answer: C
You might also like to view...
Explain how businesses segment markets on the basis of loyalty
What will be an ideal response?
On September 1, Ziegler Corporation had 50,000 shares of $5 par value common stock, and $1,500,000 of retained earnings. On that date, when the market price of the stock is $15 per share, the corporation issues a 2-for-1 stock split. The general journal entry to record this transaction is:
A. Debit Retained Earnings $750,000; credit Common Stock $750,000. B. Debit Retained Earnings $250,000; credit Stock Split Payable $250,000. C. Debit Retained Earnings $250,000; credit Common Stock $250,000. D. Debit Retained Earnings $750,000; credit Common Stock Split Distributable $750,000. E. No entry is made for this transaction.
When an interviewer deliberately creates anxiety to assess your ability to perform under stress, the interviewer is conducting an unstructured interview
Indicate whether the statement is true or false
________ allow bondholders to purchase a certain number of shares of the firm's common stock at a specified price over a certain period of time
A) Call options B) Stock purchase warrants C) Debentures D) Put options