Rock Haven Has a Proposed Project That Will Generate Sales

question 98

Multiple Choice

Rock Haven has a proposed project that will generate sales of 1,680 units annually at a selling price of $22 each. The fixed costs are $12,700 and the variable costs per unit are $5.95. The project requires $28,000 of fixed assets that will be depreciated on a straight-line basis to a zero book value over the 4-year life of the project. The salvage value of the fixed assets is $6,900 and the tax rate is 34 percent. What is the operating cash flow for year four?

• A) $11,794
• B) $12,417
• C) $14,258
• D) $16,348
• E) $16,971

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Definitions:

Electric Shock

A sudden discharge of electricity through a part of the body, causing a swift and typically painful reaction.

Milgram's Study

A series of social psychology experiments conducted by Stanley Milgram, which measured the willingness of study participants to obey an authority figure who instructed them to perform acts conflicting with their personal conscience.

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A penalty or sanction that is deemed appropriate and proportionate to the severity of the offense or misconduct committed.

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Social pressure to conform to the expectations or norms of a group, affecting beliefs, behaviors, and perceptions.