Given the Following Information and Assuming a CCA Rate of 20

question 300

Multiple Choice

Given the following information and assuming a CCA rate of 20%, what is the NPV of this project? Initial investment = $400,000; life = five years; before-tax cost savings = $150,000 per year; salvage value = $30,000 in year 5; tax rate = 34%; discount rate = 14%.

• A) -$149,841
• B) -$33,117
• C) $0
• D) $19,800
• E) $27,428

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Definitions:

SKUs

Stock Keeping Units, unique identifiers for each distinct product and service that can be purchased.

Direct Distribution

A strategy where products are sent directly from the manufacturer to the consumer without intermediary distributors or retailers.

Cross-Docks

Warehouse operations where incoming shipments are directly transferred to outgoing vehicles, minimizing storage and handling.