Use the Information for the Question(s) Below

question 86

Multiple Choice

Use the information for the question(s) below.
Ford Motor Company is considering launching a new line of hybrid Diesel-Electric SUVs. The heavy advertising expenses associated with the new SUV launch would generate operating losses of $35 million next year. Without the new SUV, Ford expects to earn pre-tax income of $80 million from operations next year. Ford pays a 30% tax rate on its pre-tax income.
-The amount that Ford Motor Company owes in taxes next year without the launch of the new SUV is closest to:

• A) $24.0 million.
• B) $56.0 million.
• C) $31.5 million.
• D) $13.5 million.

---

Definitions:

Apprenticeship

A system of training a new generation of practitioners of a trade or profession through on-the-job training and often some accompanying study.

Direct Costs

Expenses directly tied to the production of goods or provision of services, such as materials and labor.

Particular Department

Refers to a specific division or unit within an organization that focuses on a certain area of work or function.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or to compare the efficiency of several investments, typically expressed as a ratio or percentage.