Stanton Inc

question 1

Multiple Choice

Stanton Inc. is considering the purchase of a new machine, which will reduce manufacturing costs by $5,000 annually and increase earnings before depreciation and taxes by $6,000 annually. Stanton will use the MACRS method to depreciate the machine, and it has estimated the depreciation expense for the first year as $8,000. Which of the following is the supplemental operating cash flow for the first year if Stanton's marginal tax rate is 40 percent?

• A) $15,000
• B) $23,000
• C) $40,000
• D) $9,800
• E) $4,500

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Definitions:

Myelin Sheaths

The fatty covering that wraps around the axons of many neurons, which helps increase the speed at which electrical impulses propagate along the nerve cells.

Neuron's Axon

The long, slender projection of a neuron that conducts electrical impulses away from the neuron's cell body.

Auditory Cortex

The part of the brain that is responsible for processing auditory information, situated in the temporal lobe and critical for interpreting sounds and language.

Temporal Lobes

Sections of the brain located on either side of the head, above the ears, involved in processing auditory information and encoding memory.