Fitzgerald Computers Is Considering a New Project Whose Data Are

question 45

Multiple Choice

Fitzgerald Computers is considering a new project whose data are shown below.The required equipment has a 3-year tax life,after which it will be worthless,and it will be depreciated by the straight-line method over 3 years.Revenues and other operating costs are expected to be constant over the project's 3-year life.What is the project's Year 1 cash flow? $\begin{array}{lc}\text { Equipment cost (depreciable basis) } & \$ 65,000 \\\text { Straight-line depreciation rate } & 33.333 \% \\\text { Sales revenues, each year } & \$ 60,000 \\\text { Operating costs (excl. deprec.) } & \$ 25,000 \\\text { Tax rate } & 35,0 \%\end{array}$

• A) $28,115
• B) $28,836
• C) $29,575
• D) $30,333
• E) $31,092

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Definitions:

Implicit Memory

A form of memory where past experiences improve the execution of a task without the individual being consciously aware of those experiences.

Conditioned Fear Response

A learned response to a previously neutral stimulus that now triggers fear after being associated with an aversive event.

Brain Injury

Damage to the brain caused by external physical force, potentially leading to temporary or permanent impairment of cognitive, physical, and psychosocial functions.

Encoding Failure

A situation where information does not enter the brain's long-term memory and hence cannot be recalled later.