Toronto Skates Corp

question 100

Multiple Choice

Toronto Skates Corp.is considering a five-year project that requires an initial investment of $250,000.The project is expected to generate operating incomes of $60,000 in year 1, $90,000 in year 2, $150,000 in year 3, $100,000 in year 4, and $80,000 in year 5.The asset belongs to asset class 7, which has a CCA rate of 15%.The firm's marginal tax rate is 35% and cost of capital is 10%.Ignoring CCA, what is the present value of the after-tax operating cash flows?

• A)$205,272
• B)$233,739
• C)$315,804
• D)$359,598

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Definitions:

Moral Changes

The evolution or alterations in a person's understanding, values, and behaviors regarding what is right or wrong within a society or culture over time or due to experiences.

Prescription Drugs

Medications that require a doctor's authorization before they can be obtained.

Adolescents

Describes teenagers or those transitioning from childhood to adulthood, typically between ages 13 and 19.

Laxatives

Substances used to stimulate bowel movements or increase the bulk of feces, typically used to treat constipation.