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

question 123

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 terminal cash flow ?

• A) $18,120
• B) $19,000
• C) $21,000
• D) $25,000
• E) $27,000

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Definitions:

Order-getters

Salespeople who actively seek out customers and work to persuade them to make a purchase, often involving personalized service and negotiation.

Sales Presentations

Formal meetings or pitches where salespeople explain or demonstrate the features and benefits of their products or services to potential buyers.

Creative Sales Strategies

Creative Sales Strategies entail innovative approaches and techniques in selling products or services to stand out in the competitive market.

Psychological Income

Non-monetary benefits or satisfactions derived from one's work or profession, such as recognition, achievement, and a sense of purpose.