Fool Proof Software Is Considering a New Project Whose Data

question 12

Multiple Choice

Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33%, 45%, 15%, and 7% for Years 1 through 4. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow?

• A) $30,258
• B) $31,770
• C) $33,359
• D) $35,027
• E) $36,778

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Definitions:

E-Commerce

The buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions.

Equity

The value of an ownership interest in property, including shareholders' equity in a company, which represents the amount invested by the owners plus any retained earnings.