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

question 41

Multiple Choice

(Appendix 13C) Planas Corporation has provided the following information concerning a capital budgeting project:
The company's income tax rate is 35% and its after-tax discount rate is 14%. 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 income tax expense in year 2 is:

• A) $21,000
• B) $10,500
• C) $14,000
• D) $3,500

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Definitions:

Climax Community

A stable community that has reached a steady state after a succession of ecological communities have evolved and there are no further major changes.

Competitive Exclusion

The ecological principle that two species competing for the same resources cannot coexist at constant population values if other ecological factors remain constant.

Paramecium Caudatum

A species of ciliate protozoan that lives in freshwater environments and is known for its slipper-like shape.

P. Aurelia

A species of single-celled ciliate protozoa that is often studied in genetics and biology.