Unique Style Inc

question 35

Multiple Choice

Unique Style Inc.is considering a five-year expansion project that requires an initial investment of $500,000 for the purchase of a new machine with a CCA rate of 30%.The projected sales revenue and related costs are $450,000 and $180,000 per year, respectively.The project's fixed costs are an additional $48,000 per year.The appropriate discount rate is 8%.The firm's marginal tax rate is 40%.What is the after-tax cash flow in year three, assuming half-year rule is applicable for CCA in year 1?

• A)$162,600
• B)$168,900
• C)$191,400
• D)$197,700

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Definitions:

Well-Informed

Having access to all necessary information to make educated decisions or opinions on a particular matter.

Labor Productivity

A measure of the economic output per hour of labor worked.

Health Care Industry

The sector that provides medical services, manufactures medical equipment, and develops pharmaceuticals, encompassing providers like hospitals and doctors.

Wages

Wages represent the compensation paid to employees for their labor, usually expressed as an hourly rate or annual salary, and are a key factor in employment agreements.