Colors and More Is Considering Replacing the Equipment It Uses

question 93

Multiple Choice

Colors and More is considering replacing the equipment it uses to produce crayons.The equipment would cost $1.37 million,have a 12-year life,and lower manufacturing costs by an estimated $310,000 a year.The equipment will be depreciated using straight-line depreciation to a book value of zero.The required rate of return is 15 percent and the tax rate is 35 percent.What is the net income from this proposed project?

• A)$18,508.75
• B)$40,211.24
• C)$66,441.67
• D)$127,291.67
• E)$136,709.48

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Definitions:

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Stigma

A mark of disgrace associated with a particular circumstance, quality, or person, often leading to exclusion or discrimination.

Cognitive Processing Approach

A therapeutic technique focusing on altering maladaptive thoughts and beliefs through cognitive restructuring, often used in treating PTSD and anxiety disorders.

Traumatic Event

An incident that causes psychological trauma, resulting in an emotional response of intense fear, horror, or helplessness.