Manjarrez Corporation Has Provided the Following Information Concerning a Capital

question 75

Multiple Choice

Manjarrez 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 6%. 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

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Definitions:

Boundaryless Organizations

Companies that remove traditional barriers between departments as well as barriers between the organization and the external environment.

Internal Boundaries

Guidelines and distinctions set within an organization to delineate responsibilities, roles, and departments.

External Environment

External factors, forces, situations, and events outside the organization that can affect its performance and strategies.

Bureaucracy

A rational and efficient form of organization founded on logic, order, and legitimate authority.