Whitestone Products Is Considering a New Project Whose Data Are $\$ 70,000$

question 51

Multiple Choice

Whitestone Products is considering a new project whose data are shown below.The required equipment has a 3-year tax life,and the accelerated rates for such property are 33.33%,44.45%,14.81%,and 7.41% for Years 1 through 4.Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life.What is the project's Year 4 cash flow? Equipment cost (depreciable basis) $\$ 70,000$
Sales revenues, each year $\$ 42,500$
Operating costs (excl. deprec.) $\$ 25,000$
Tax rate $35.0 \%$

• A) $11,904
• B) $12,531
• C) $13,190
• D) $13,850
• E) $14,542

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Definitions:

Biologically Determined

Refers to traits, behaviors, or conditions that are influenced by genetic makeup rather than the environment.

Instinct

An innate, typically fixed pattern of behavior in animals in response to certain stimuli that is primarily genetically coded.

Homeostasis

The self-regulating process by which biological systems tend to maintain stability while adjusting to conditions that are optimal for survival.

Steady State

A condition in which all aspects of a system are in equilibrium or unchanging over time, often used in physics and economics to describe stable systems.