Table 11.2 Computer Disk Duplicators, Inc. Has Been Considering Several Capital Investment

question 67

Multiple Choice

Table 11.2
Computer Disk Duplicators, Inc. has been considering several capital investment proposals for the year beginning in 2014. For each investment proposal, the relevant cash flows and other relevant financial data are summarized in the table below. In the case of a replacement decision, the total installed cost of the equipment will be partially offset by the sale of existing equipment. The firm is subject to a 40 percent tax rate on ordinary income and on long-term capital gains. The firm's cost of capital is 15 percent.
________________________________________________________ *Not applicable
-For Proposal 3, the tax effect on the sale of the existing asset results in ________. (See Table 11.2)

• A) $8,000 tax liability
• B) $16,000 tax liability
• C) $20,000 tax liability
• D) $23,200 tax liability

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Definitions:

Glassdoor Survey

An evaluative or opinion-based survey conducted through the Glassdoor platform, often regarding employer reviews or workplace insights.

Hiring Process

The sequence of steps taken by an employer to identify, attract, select, and onboard a suitable candidate for a job opening.

Employee Benefits Package

A collection of non-wage compensation items offered to employees in addition to their salaries, such as health insurance, retirement plans, and paid time off.

Ergonomics

The study of people's efficiency in their working environment, focusing on the design of equipment, systems, and processes to improve safety, comfort, and productivity.