Houston's Is Considering a Project That Will Produce Incremental Annual

question 70

Multiple Choice

Houston's is considering a project that will produce incremental annual sales of $361,000 and increase cash expenses by $198,000. If the project is implemented, taxes will increase from $31,000 to $47,000. The company is debt-free. What is the amount of the operating cash flow using the top-down approach?

• A) $172,000
• B) $147,000
• C) $122,000
• D) $138,000
• E) $163,000

---

Definitions:

Intranet

A private network accessible only by an organization's staff, often used to share information, operational systems, or computing services within the organization.

Extranet

A private network that uses Internet technology and public telecommunication systems to securely share part of a business's information or operations with suppliers, vendors, partners, customers, or other businesses.

Enterprise Network

An organization’s network, which is composed of interconnected multiple LANs and WANs.

Traditional Network

A communication framework that relies on physical infrastructure and basic software for connectivity and data transfer among users.