Ernie's Electrical Is Evaluating a Project Which Will Increase Sales

question 71

Multiple Choice

Ernie's Electrical is evaluating a project which will increase sales by €50,000 and costs by €30,000.The project will cost €150,000 and be depreciated straight-line to a zero book value over the 10 year life of the project.The applicable tax rate is 34%.What is the operating cash flow for this project?

• A)€3,300
• B)€5,000
• C)€8,300
• D)€13,300
• E)€18,300

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Definitions:

Uterus

A female reproductive organ where the development of the fetus takes place during pregnancy.

Yolk Sac

An extra-embryonic membrane that provides nutrients to the early embryo; it is a critical structure in the development of many vertebrates.

Chorion

The outermost fetal membrane in many vertebrates, including humans, contributing to the formation of the placenta.

Amnion

A thin but tough sac of membrane that encloses the embryo or fetus in the uterus, containing the amniotic fluid.