Keyser Mining Is Considering a Project That Will Require the Purchase

question 7

Multiple Choice

Keyser Mining is considering a project that will require the purchase of $875,000 in new equipment.The equipment will be depreciated straight-line to a zero book value over the 7-year life of the project.The equipment can be scraped at the end of the project for 5 percent of its original cost.Annual sales from this project are estimated at $420,000.Net working capital equal to 20 percent of sales will be required to support the project.All of the net working capital will be recouped.The required return is 16 percent and the tax rate is 34 percent.What is the value of the depreciation tax shield in year 4 of the project?

• A)$42,500
• B)$52,200
• C)$68,600
• D)$71,400
• E)$76,500

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Definitions:

Coping Strategies

Techniques or methods used to manage or overcome difficulties and stress.

Family Focused Interventions

are therapeutic or preventive strategies aimed at improving the dynamics and functioning of a family to improve outcomes for all members.

Social Skills

The abilities used by individuals to interact and communicate with others effectively.

Emotion-focused Coping

A type of stress management that involves trying to reduce the negative emotional responses associated with stress, such as embarrassment, fear, anxiety, depression, excitement, and frustration.