Use the Information for the Question(s)below

question 18

Multiple Choice

Use the information for the question(s) below.
The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years.The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0.
The cane manufacturing machine will result in sales of 2000 canes in year 1.Sales are estimated to grow by 10% per year each year through year three.The price per cane that Sisyphean will charge its customers is $18 each and is to remain constant.The canes have a cost per unit to manufacture of $9 each.
Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts.It is estimated that the Sisyphean Corporation needs to hold 2% of its annual sales in cash,4% of its annual sales in accounts receivable,9% of its annual sales in inventory,and 6% of its annual sales in accounts payable.The firm is in the 35% tax bracket,and has a cost of capital of 10%.
-The incremental unlevered net income in the first year for the Sisyphean Corporation's project is closest to:

• A)$8000
• B)$18,000
• C)$5200
• D)$11,700

---

Definitions:

Jean Piaget

A Swiss psychologist known for his pioneering work in child development, particularly his theory of cognitive development.

Zone of Proximal Development

A concept in education psychology referring to the difference between what a learner can do without help and what they can achieve with guidance and encouragement from a skilled partner.

Distal Learning

A term likely meant to refer to "distant learning," which involves educational processes that occur when instructors and students are not physically present in the same location.

Structured Application

A methodically organized and systematically planned software application designed to perform specific functions with predefined rules.