Fool Proof Software Is Considering a New Project Whose Data

question 72

Multiple Choice

Fool Proof Software is considering a new project whose data are shown below.The equipment has an economic life of 3 years,and is in the CCA class 10 (30%) .Revenues and cash operating costs are expected to be constant over the project's 3-year life.What is the net operating cash flow for Year 1? $\begin{array}{lr}\text { Equipment cost } & \$ 65,000 \\\text { Annual sales revenues } & \$ 60,000 \\\text { Annual cash operating costs } & \$ 25,000 \\\text { Tax rate } & 35.0 \%\end{array}$

• A)$26,162.50
• B)$28,770.00
• C)$30,359.25
• D)$25,275.50

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Definitions:

Deed

A deed is a legal document that represents the ownership and transfers the title of property from one party to another.

Proceeds

The amount of money received from a transaction or event, such as the sale of an asset or completion of a project.

Title Examination

The process of reviewing and verifying the legal ownership and conditions of a property before its sale.

Final Contract

The conclusive agreement between parties, binding them to its terms and signaling the end of negotiations.