Marasco Corporation Has Provided the Following Information Concerning a Capital

question 129

Multiple Choice

Marasco Corporation has provided the following information concerning a capital budgeting project: The income tax rate is 30%. The after-tax discount rate is 13%. The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $20,000. 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.
Use Exhibit 7B-1 to determine the appropriate discount factor(s) using table.
The net present value of the project is closest to:

• A) $91,000
• B) $128,199
• C) $77,650
• D) $48,199

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Definitions:

Gastric Lipase

Gastric lipase is an enzyme secreted by the stomach that plays a crucial role in digesting dietary fats by breaking down triglycerides into monoglycerides and free fatty acids.

HCl

Hydrochloric acid, a strong acidic compound found in gastric juice that aids in digestion and kills bacteria.

Fundus

The upper part of the stomach, which creates a reservoir for undigested food and gas produced during digestion.

Pyloric

Pertaining to the region of the stomach that connects to the duodenum, involved in the regulation of gastric emptying.