A New Project Is Expected to Generate $800,000 in Revenues,$250,000

question 155

Multiple Choice

A new project is expected to generate $800,000 in revenues,$250,000 in cash operating expenses,and depreciation expense of $150,000 in each year of its 10-year life.The corporation's tax rate is 35%.The project will require an increase in net working capital of $85,000 in year one and a decrease in net working capital of $75,000 in year ten.What is the free cash flow from the project in year one?

• A) $298,000
• B) $375,000
• C) $380,000
• D) $410,000

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Definitions:

Corporate Social Responsibility

A business model in which companies integrate social and environmental concerns in their operations and interactions with stakeholders.

Shareholders

Individuals or entities that own shares in a corporation, giving them a stake in the company's assets and sometimes influence over its management.

Ethical Role Models

Individuals who exhibit high moral standards and ethical behavior, serving as examples for others to emulate.

Levels Of Management

The hierarchical structure within an organization that classifies positions from top management (executives) through middle management down to lower-level management.