A New Machine Is Expected to Produce a MACRS Deduction

question 41

Multiple Choice

A new machine is expected to produce a MACRS deduction in three years of $50,000.If the company has a 12% after-tax hurdle rate and is subject to a 30% income tax rate,the correct discounted net cash flow to include in an acquisition analysis would be:

• A)$0.
• B)$10,680.
• C)$24,920.
• D)$46,280.
• E)some other amount.

Learn the role of hypotheses in guiding research and the importance of statistical language in reporting findings.

Understand the relationship between plant size and cost efficiency in the long run.

Grasp the concept of how average total cost (ATC), marginal cost (MC), and average variable cost (AVC) relate to each other.

Differentiate between short-run and long-run operational decisions, including shutdowns and going out of business.

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Definitions:

Expected Return

Expected return is the weighted average of the probable returns of an investment, accounting for all possible scenarios.

Risky Asset

An asset that carries a significant chance of losing part or all of its investment value.

Expected Profit

The forecasted amount of profit or loss that is anticipated from a business venture or investment, based on calculations or assumptions.

Risky Portfolio

An investment portfolio that consists of assets with higher levels of risk, with the potential for higher returns.