Fool Proof Software Is Considering a New Project Whose Data

question 53

Multiple Choice

Fool Proof Software is considering a new project whose data are shown below.The equipment that would be used has a 3-year tax life,and the allowed depreciation rates for such property are 33%,45%,15%,and 7% for Years 1 through 4.Revenues and other operating costs are expected to be constant over the project's 10-year expected life.What is the Year 1 cash flow?

• A)$30,258
• B)$31,770
• C)$33,359
• D)$35,027
• E)$36,778

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Definitions:

Vitality Index

A measure of innovation that expresses the percentage of sales from new products or services introduced over a certain period.

Total Sales Revenue

The entire amount of income generated by the sale of goods or services related to the company's primary operations.

Formal Decision-making Process

A structured approach to decision-making that involves systematic steps such as identifying a problem, generating alternatives, evaluating alternatives, and making a decision.

Stage-Gate®process

A project management approach that divides the process of bringing a new product to market into distinct stages separated by decision-making checkpoints or "gates."