Prudencio Corporation Has Provided the Following Information Concerning a Capital

question 296

Multiple Choice

Prudencio Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.The total cash flow net of income taxes in year 3 is:

• A) $70,000
• B) $49,000
• C) $89,000
• D) $61,000

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Definitions:

Exhaust Extraction System

A ventilation system used to capture and remove exhaust gases from a garage, workshop, or other enclosed spaces.

Creeper

A low, wheeled platform on which a person lies to move easily under vehicles for inspection or repair.

Pneumatic-Hydraulic

A system that utilizes both air (pneumatic) and fluid pressure (hydraulic) to transmit power.

Electric-Hydraulic

A system that uses electric power to assist the hydraulic operations in a vehicle, enhancing efficiency.