Your Company,Q4 Inc A)$16,21300
B)$20,067

question 12

Multiple Choice

Your company,Q4 Inc.,is considering a new project whose data are shown below.The required equipment has an economic year of 5 years,and has a CCA rate of 30% in class 10.Revenues and cash operating costs are expected to be constant over the project's 5-year operating life.What is the project's net operating cash flow during Year 2? $\begin{array}{lr}\text { Equipment cost } & \$ 70,000 \\\text { Sales revenues (each year) } & \$ 50,000 \\\text { Cash operating costs (each year) } & \$ 25,000 \\\text { Tax rate } & 35.0 \%\end{array}$

• A)$16,213.00
• B)$20,067.50
• C)$22,497.50
• D)$18,863.50

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Definitions:

Unbiased Managers

Refers to managers who make decisions without prejudice or favoritism, aiming for fairness and objectivity in business operations.

Terminal Value

The estimated value of a business at the end of a specific period, considering all future cash flows discounted back to present value.

Detailed Forecast Period

An extended timeframe over which detailed predictions about a company's financial performance, including revenue and expenses, are made.

Economic Conditions

Refer to the current state of the economy in a specific region, encompassing factors like inflation rate, employment levels, GDP growth, and overall market health.