Katie's Cafe Is Considering the Addition of a New Refrigeration

question 254

Multiple Choice

Katie's Cafe is considering the addition of a new refrigeration system that will cut annual food costs by $15,001. The system will cost $36,000 to purchase and install. This system is expected to have a 3-year life and will be depreciated to zero using straight-line depreciation. What is the annual net income for this project if the tax rate is 34%?

• A) $880
• B) $1,020
• C) $1,240
• D) $1,750
• E) $1,980

---

Definitions:

Demand Curve

A graphical representation depicting the relationship between the price of a good or service and the quantity demanded by consumers.

Demand

The amount of a product or service that buyers are ready and capable of buying at different price levels over a specified time frame.

Increase

A situation where there is a growth or rise in figures, amounts, or indicators in an economic context.

Demand Curve

A graphical representation that shows the relationship between the price of a good and the quantity demanded by consumers.