Whitestone Products Is Considering a New Project Whose Data Are

question 23

Multiple Choice

Whitestone Products is considering a new project whose data are shown below.The required equipment has a 3-year tax life, and the accelerated rates for such property are 33.33%, 44.45%, 14.81%, and 7.41% for Years 1 through 4.Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life.What is the project's Year 4 cash flow? $\begin{array}{lr}\text { Equipment cost (depreciable basis) } & \$ 70,000 \\\text { Sales revenues, each year } & \$ 42,500 \\\text { Operating costs (excl. deprec.) } & \$ 25,000 \\\text { Tax rate } & 25.0 \%\end{array}$

• A) $13,016
• B) $13,701
• C) $14,422
• D) $15,143
• E) $15,900

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Definitions:

Private School

An educational institution not funded by public sources and often selective in its admissions.

Public School

In the United States, a school that is maintained at public expense for the education of the children of a community or district.

Data Collection

The process of gathering and measuring information on variables of interest in an established systematic fashion that enables one to answer stated research questions, test hypotheses, and evaluate outcomes.

Stress Reactions

The body's response to any demand or threat, which can be physical, psychological, or emotional in nature.