Julio Company Purchased a $200,000 Machine That Has a Four-Year

question 52

Multiple Choice

Julio Company purchased a $200,000 machine that has a four-year life and no salvage value.The company uses straight-line depreciation on all asset acquisitions and is subject to a 30% tax rate.The proper cash flow to show in a discounted-cash-flow analysis as occurring at time 0 would be:

• A)$(200,000).
• B)$(140,000).
• C)$(35,000).
• D)$15,000.
• E)$50,000.

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Definitions:

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a specific price over a given period of time.

Price of a Good

The amount of money required to purchase a specified quantity of a product or service.

Normal Goods

Goods for which demand increases as the income of the consumer increases.

Tablets

Portable computing devices featuring touchscreens and offering a wide range of applications.