Chene Corporation Has Provided the Following Information Concerning a Capital

question 48

Multiple Choice

Chene Corporation has provided the following information concerning a capital budgeting project: The equipment will have a 4 year expected life and zero salvage value. The company's income tax rate is 30%, and the after-tax discount rate is 10%. The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $50,000. 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) $335,914
• B) $224,000
• C) $169,516
• D) $135,914

---

Definitions:

Functions

The natural purpose or activities associated with a person, organ, or system in biology, or a specific role or activity in more general contexts.

Birdsong

Vocalized sounds produced by birds, which can serve various functions including communication and mating.

Brain Areas

Distinct sections of the brain dedicated to specific functions, such as the occipital lobe for vision or the temporal lobe for hearing and memory.