Ben's Border Café Is Considering a Project Which Will Produce

question 304

Multiple Choice

Ben's Border Café is considering a project which will produce sales of $16,000 and increase cash expenses by $10,001. If the project is implemented, taxes will increase from $23,000 to $24,500 and depreciation will increase from $4,000 to $5,501. What is the amount of the operating cash flow using the top-down approach?

• A) $4,000
• B) $4,500
• C) $6,000
• D) $7,500
• E) $8,500

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Definitions:

Linear Model

A statistical approach to modeling the relationship between one or more independent variables and a dependent variable by fitting a linear equation to observed data.

Logarithm

The exponent by which a base must be raised to yield a given number, commonly used in mathematical and scientific calculations.

Maple Tree

A type of tree belonging to the genus Acer, known for its distinctive leaf shape and for producing maple syrup.

Regression Analysis

A set of statistical processes for estimating the relationships among variables, often used to predict the value of a dependent variable based on one or more independent variables.