Chandler Tire Co

question 51

Multiple Choice

Chandler Tire Co.is trying to decide which one of two projects it should accept.Both projects have the same start-up costs.Project 1 will produce annual cash flows of $52,000 a year for six years.Project 2 will produce cash flows of $48,000 a year for eight years.The company requires a 15 percent rate of return.Which project should the company select and why?

• A)Project 1, because the annual cash flows are greater by $4,000 than those of Project 2
• B)Project 1, because the present value of its cash inflows exceeds those of Project 2 by $14,211.62
• C)Project 2, because the total cash inflows are $72,000 greater than those of Project 1
• D)Project 2, because the present value of the cash inflows exceeds those of Project 1 by $18,598.33
• E)It does not matter as both projects have almost identical present values.

Comprehend the taxation dynamics for partnerships and sole proprietorships.

Recognize the decision-making processes and control in different business forms.

Understand the capital raising and liability aspects of partnerships versus sole proprietorships.

Grasp the concept of unlimited and limited liability in business entities.

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Definitions:

Sandwich Generation

Taking care of one’s own children and aging parents.

Aging Parents

Older adults who are parents, often facing health and mobility challenges while possibly being cared for by their children.

Attempt Suicide

The act of intentionally trying to end one’s own life but not resulting in death.

Suicide Rates

The proportion of individuals within a specified population who die by suicide over a given period.