A Project Will Reduce Costs by $34,000 but Increase Depreciation

question 50

Multiple Choice

A project will reduce costs by $34,000 but increase depreciation by $16,500.What is the operating cash flow of this project based on the tax shield approach if the tax rate is 40 percent?

• A)$5,775
• B)$9,275
• C)$15,625
• D)$20,400
• E)$27,000

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Definitions:

Motivation

The psychological processes that arouse and direct goal-oriented behavior.

Maslow's Hierarchy

is a psychological theory proposing that human needs are arranged in a hierarchy, from basic physiological needs to the need for self-actualization.

Valenced Reactions

Emotional responses that are categorized as either positive or negative in nature, influenced by personal experiences, attitudes, and perceptions.

Arousal

A physiological and psychological state of being awake, alert, and engaged.