Lasalle Industries Is Considering the Purchase of a New Machine

question 1

Multiple Choice

Lasalle Industries is considering the purchase of a new machine that will cost $250,000,plus an additional $10,000 to ship and install.The new machine will have a 5-year useful life and will be depreciated to zero using the straight-line method.The machine is expected to have a salvage value of $30,000 at the end of year five.LaSalle's income tax rate is 40%.The additional net working capital from this project of $50,000 is expected to return to its pre-project level upon termination.What is the non-operating terminal cash flow of the machine?

• A) -$32,000
• B) $48,000
• C) $68,000
• D) $80,000

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Definitions:

Electroplating

The act of depositing the atoms of one type metal onto another.

Metal

A class of elements characterized by their malleability, conductivity, and metallic luster, typically solid under standard conditions.

Electrolysis

The decomposition of a chemical compound or metals caused by an electric current.

Separating Elements

Components or techniques used in systems and processes to divide, isolate, or detach different substances or parts.