Quiz #5npvx quiz #2 income tax expenses su Facebok TwitterLinkedin D The Weather
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Quiz #5npvx
quiz #2 income tax expenses su
Facebok TwitterLinkedin D The Weather Chanel elp aTrloAdvisor er 13 Appendix C Quiz 6 Saved Help Save&Exit; Submt Rhoads Corporation is considering a capital budgeting pro ect that would require an inves en r sooooo n eup en vit·you e pet hteancama ngeval e Anna incremental sales will be $460,000 and annual incremental cash operating expenses will be $330,000. The company's Income tax rate is 35% and the after-tax discount rate is 15% The company uses straight-ine depreciation on all equipment; the annual depreciation expense wilt l be $40,000.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 Cick here to view Exhibit 138.1 to determine the appropriate discount factorts) using table. The net present value of the project is closest to: Sipped Mutiple Choice $211,280 $234,000 $281,316 $121,316 KPrex 5 of 10Explanation / Answer
Sales $460000
Operating expenses ($330000)
Depreciation ($40000)
$90000
Tax rate 35% ($31500)
Net income 58500
Cash inflows 98500
Discount rate 15%
PV of annuity of 15% for 4 years 2.8550
PV of cash inflows $281217.5
PV of cash outflows $160000
NPV $121218.
Tax rate
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