(Appendix 13C) Rollans Corporation Has Provided the Following Information Concerning

question 13

Multiple Choice

(Appendix 13C) Rollans Corporation has provided the following information concerning a capital budgeting project:
The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.
-The total cash flow net of income taxes in year 2 is:

• A) $80,000
• B) $28,000
• C) $102,000
• D) $130,000

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Definitions:

Liability

A financial obligation or amount owed by a business or individual to another entity.

Account Receivable

Funds that customers owe to a business for products or services they have received but have not paid for.

Customer's Check

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer or the order of a person, company, or entity.

Sarbanes-Oxley Act

A U.S. law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.