A Project Will Increase the Sales of Joe's Workshop by $50,000

question 49

Multiple Choice

A project will increase the sales of Joe's Workshop by $50,000 and increase cash expenses by $36,000. The project will cost $30,000 and be depreciated using straight-line depreciation to a
Zero book value over the 3-year life of the project. The company has a marginal tax rate of 35%.
What is the operating cash flow of the project using the tax shield approach?

• A) $8,400
• B) $9,100
• C) $12,600
• D) $15,600
• E) $17,500

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Definitions:

Competitive Advantage

The attribute that allows an organization to outperform its competitors, often achieved through offering superior value to customers.

Behavioral Sciences

Encompass a range of disciplines, including psychology, sociology, and anthropology, that explore the activities and interactions among human beings.

Political Science

the study of governments, public policies, and political processes, systems, and political behavior.

Behavioral Sciences

The study of human and animal behavior through observation and scientific research, aiming to understand, predict, and address behaviors.