Real Time Inc. the President of Real Time Inc. Has Asked You to Asked

question 165

Multiple Choice

Real Time Inc.
The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $40,000, and it falls into the MACRS 3-year class. Purchase of the computer would require an increase in net working capital of $2,000. The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 3 years and then be sold for $25,000. The firm's marginal tax rate is 40 percent, and the project's required rate of return is 14 percent.
-Refer to Real Time Inc.What is the supplemental operating cash flow in Year 2?

• A) $9,000
• B) $10,240
• C) $11,687
• D) $13,453
• E) $16,200

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Definitions:

Personalized Gateway

A customized entry point to digital content or services that adapts to the individual user's preferences and needs.

Advanced Search

A feature that allows users to perform searches based on multiple criteria and filters to refine results more precisely than with simple searches.

Redundancy

The duplication of critical components or functions of a system with the intention of increasing reliability of the system, often in the case of a backup or fail-safe.

Database Systems

Structured collections of data or databases managed by software that allows for the storage, retrieval, and manipulation of data.