Better Beverages Purchased $139,700 of Fixed Assets That Are Classified

question 50

Multiple Choice

Better Beverages purchased $139,700 of fixed assets that are classified as five-year MACRS property. The MACRS rates are .2, .32, .192, .1152, .1152, and .0576 for Years 1 to 6, respectively. What will the accumulated depreciation be at the end of Year 4 if the tax rate is 21 percent and no bonus depreciation is taken?

• A) $76,269.49
• B) $16,093.44
• C) $24,140.16
• D) $48,755.09
• E) $115,559.84

---

Definitions:

Net Present Value

A financial measure that calculates the present value of net cash flows (inflows minus outflows) from an investment, discounting future cash flows to the present.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate that makes the net present value of cash flows equal to zero.

Capital Expenditure Decision Process

The process of making decisions related to the acquisition of capital assets, taking into consideration their costs, benefits, and risks.

Profitability Index

A financial metric that compares the present value of future cash flows from an investment to its initial cost, used to evaluate investment attractiveness.