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(Appendix 13C) Mesko Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Mesko Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 35% and its after-tax discount rate is 15%. 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 income tax expense in year 2 is: A) $18,000 B) $168,000 C) $21,000 D) $129,000 The company's income tax rate is 35% and its after-tax discount rate is 15%. 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 income tax expense in year 2 is:


A) $18,000
B) $168,000
C) $21,000
D) $129,000

E) A) and B)
F) B) and D)

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(Appendix 13C) Houze Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Houze Corporation has provided the following information concerning a capital budgeting project: The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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 total cash flow net of income taxes in year 2 is: A) $30,000 B) $46,500 C) $59,500 D) $70,000 The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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 total cash flow net of income taxes in year 2 is:


A) $30,000
B) $46,500
C) $59,500
D) $70,000

E) None of the above
F) B) and D)

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(Appendix 13C) Mesko Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Mesko Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 35% and its after-tax discount rate is 15%. 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 total cash flow net of income taxes in year 2 is: A) $33,000 B) $60,000 C) $59,000 D) $80,000 The company's income tax rate is 35% and its after-tax discount rate is 15%. 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 total cash flow net of income taxes in year 2 is:


A) $33,000
B) $60,000
C) $59,000
D) $80,000

E) B) and D)
F) B) and C)

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(Appendix 13C) Paletta Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Paletta Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 30% and its after-tax discount rate is 7%. 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: A) $298,250 B) $475,902 C) $195,902 D) $280,000 The company's income tax rate is 30% and its after-tax discount rate is 7%. 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:


A) $298,250
B) $475,902
C) $195,902
D) $280,000

E) A) and B)
F) All of the above

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(Appendix 13C) Mesko Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Mesko Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 35% and its after-tax discount rate is 15%. 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 total cash flow net of income taxes in year 3 is: A) $33,000 B) $59,000 C) $19,000 D) $40,000 The company's income tax rate is 35% and its after-tax discount rate is 15%. 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 total cash flow net of income taxes in year 3 is:


A) $33,000
B) $59,000
C) $19,000
D) $40,000

E) All of the above
F) None of the above

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(Appendix 13C) Correll Corporation is considering a capital budgeting project that would require investing $240,000 in equipment with an expected life of 4 years and zero salvage value. Annual incremental sales would be $570,000 and annual incremental cash operating expenses would be $420,000. The project would also require a one-time renovation cost of $40,000 in year 3. The company's income tax rate is 30% and its after-tax discount rate is 15%. 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 3 is:


A) $83,000
B) $123,000
C) $95,000
D) $110,000

E) B) and D)
F) B) and C)

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(Appendix 13C) Rollans Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Rollans Corporation has provided the following information concerning a capital budgeting project: 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 total cash flow net of income taxes in year 2 is: A) $80,000 B) $28,000 C) $102,000 D) $130,000 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 total cash flow net of income taxes in year 2 is:


A) $80,000
B) $28,000
C) $102,000
D) $130,000

E) None of the above
F) A) and D)

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Duma Corporation has provided the following information concerning a capital budgeting project: Duma Corporation has provided the following information concerning a capital budgeting project: 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. Required: Determine the net present value of the project.Show your work! 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. Required: Determine the net present value of the project.Show your work!

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Depreciation expense = (Origin...

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(Appendix 13C) Mesko Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Mesko Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 35% and its after-tax discount rate is 15%. 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 total cash flow net of income taxes in year 2 is: A) $109,000 B) $130,000 C) $70,000 D) $21,000 The company's income tax rate is 35% and its after-tax discount rate is 15%. 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 total cash flow net of income taxes in year 2 is:


A) $109,000
B) $130,000
C) $70,000
D) $21,000

E) A) and C)
F) C) and D)

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(Appendix 13C) Layer Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Layer Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 30% and its after-tax discount rate is 8%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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: A) $50,660 B) $25,616 C) $10,916 D) $70,000 The company's income tax rate is 30% and its after-tax discount rate is 8%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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:


A) $50,660
B) $25,616
C) $10,916
D) $70,000

E) A) and B)
F) B) and D)

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B

(Appendix 13C) Layer Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Layer Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 30% and its after-tax discount rate is 8%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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 total cash flow net of income taxes in year 2 is: A) $70,000 B) $47,000 C) $30,000 D) $61,000 The company's income tax rate is 30% and its after-tax discount rate is 8%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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 total cash flow net of income taxes in year 2 is:


A) $70,000
B) $47,000
C) $30,000
D) $61,000

E) A) and B)
F) C) and D)

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Roemen Corporation is considering a capital budgeting project that would require investing $160,000 in equipment with a 4 year useful life and zero salvage value.Annual incremental sales would be $410,000 and annual incremental cash operating expenses would be $280,000.An investment of $20,000 in working capital would be required immediately and would be released for use elsewhere at the end of the project.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 company's tax rate is 30% and the after-tax discount rate is 12%. Required: Determine the net present value of the project.Show your work!

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Depreciation expense = (Original cost - Salvage value)÷ Useful life = ($160,000 - $0)÷ 4 years = $40,000 per year 11ea7761_15ee_dcd2_81a5_fdef51ac2629_TB2580_00

(Appendix 13C) Annala Corporation is considering a capital budgeting project that would require investing $80,000 in equipment with an expected life of 4 years and zero salvage value. Annual incremental sales would be $250,000 and annual incremental cash operating expenses would be $180,000. The project would also require an immediate investment in working capital of $20,000 which would be released for use elsewhere at the end of the project. The company's income tax rate is 30% and its after-tax discount rate is 13%. 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) $15,000
B) $70,000
C) $55,000
D) $50,000

E) A) and B)
F) A) and C)

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C

(Appendix 13C) Marbry Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Marbry Corporation has provided the following information concerning a capital budgeting project: 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 income tax expense in year 3 is: A) $42,000 B) $21,000 C) $28,000 D) $7,000 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 income tax expense in year 3 is:


A) $42,000
B) $21,000
C) $28,000
D) $7,000

E) B) and D)
F) B) and C)

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(Appendix 13C) Marbry Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Marbry Corporation has provided the following information concerning a capital budgeting project: 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: A) $107,880 B) $182,360 C) $267,880 D) $169,000 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:


A) $107,880
B) $182,360
C) $267,880
D) $169,000

E) None of the above
F) A) and D)

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(Appendix 13C) Stockinger Corporation has provided the following information concerning a capital budgeting project: Investment requiredin equipment. $280,000Expected life of the project. 4 Salvage value of equipment. $0 Annual sales.$580,000Annual cash operating expenses $420,000Working capital requirement. $30,000One-time renovation expense in year 3$80,000\begin{array}{lr}\text {Investment requiredin equipment. }&\$280,000\\\text {Expected life of the project. }&4\\\text { Salvage value of equipment. }&\$0\\\text { Annual sales.}&\$580,000\\\text {Annual cash operating expenses }&\$420,000\\\text {Working capital requirement. }&\$30,000\\\text {One-time renovation expense in year 3}&\$80,000\\\end{array} The company's income tax rate is 35% and its after-tax discount rate is 11%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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 total cash flow net of income taxes in year 3 is:


A) $76,500
B) $80,000
C) $48,500
D) $128,500

E) A) and B)
F) All of the above

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Bonomo Corporation has provided the following information concerning a capital budgeting project: Bonomo Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment. The income tax expense in year 3 is: A) $24,000 B) $15,000 C) $36,000 D) $9,000 The company uses straight-line depreciation on all equipment. The income tax expense in year 3 is:


A) $24,000
B) $15,000
C) $36,000
D) $9,000

E) A) and D)
F) A) and C)

Correct Answer

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(Appendix 13C) Paletta Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Paletta Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 30% and its after-tax discount rate is 7%. 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 total cash flow net of income taxes in year 3 is: A) $98,000 B) $110,000 C) $74,000 D) $154,000 The company's income tax rate is 30% and its after-tax discount rate is 7%. 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 total cash flow net of income taxes in year 3 is:


A) $98,000
B) $110,000
C) $74,000
D) $154,000

E) A) and B)
F) C) and D)

Correct Answer

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(Appendix 13C) Layer Corporation has provided the following information concerning a capital budgeting project: (Appendix 13C) Layer Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 30% and its after-tax discount rate is 8%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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 total cash flow net of income taxes in year 3 is: A) $41,000 B) $61,000 C) $47,000 D) $50,000 The company's income tax rate is 30% and its after-tax discount rate is 8%. The working capital would be required immediately and would be released for use elsewhere at the end of the project. 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 total cash flow net of income taxes in year 3 is:


A) $41,000
B) $61,000
C) $47,000
D) $50,000

E) None of the above
F) C) and D)

Correct Answer

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(Appendix 13C) Correll Corporation is considering a capital budgeting project that would require investing $240,000 in equipment with an expected life of 4 years and zero salvage value. Annual incremental sales would be $570,000 and annual incremental cash operating expenses would be $420,000. The project would also require a one-time renovation cost of $40,000 in year 3. The company's income tax rate is 30% and its after-tax discount rate is 15%. 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) $95,000
B) $90,000
C) $150,000
D) $123,000

E) A) and B)
F) A) and C)

Correct Answer

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