Scott Corporation's New Project Calls for an Investment of $10,000

question 49

Multiple Choice

Scott Corporation's new project calls for an investment of $10,000. It has an estimated life of 10 years. The IRR has been calculated to be 15 percent. If cash flows are evenly distributed and the tax rate is 40 percent, what is the annual before-tax cash flow each year? (Assume depreciation is a negligible amount.)

• A) $1,993
• B) $3,321
• C) $1,500
• D) $4,983
• E) $5,019

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Definitions:

Self-sufficiency

The ability of an individual or nation to provide for their own needs without external assistance.

Self-sufficiency

The ability of a country, region, or individual to produce everything they need without relying on external sources.

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The export-import sector consists of the trade activities in which goods and services are sold to a foreign country (export) and bought from a foreign country (import), contributing significantly to a nation's economy.

Joseph Stiglitz

An American economist and a professor at Columbia University, known for his work on the theory of markets with asymmetric information and his critical view on global economic policies.