Jones Crusher Company Is Evaluating the Proposed Acquisition of a New

question 32

Multiple Choice

Jones Crusher Company is evaluating the proposed acquisition of a new machine.The machine will cost $190,000,and it will cost another $33,000 to modify it for special use by the firm.The machine falls into the MACRS 3-year class,and it will be sold after 3 years of use for $110,000.The machine will require an increase in net working capital of $9,000 and will have no effect on revenues,but is expected to save the firm $90,000 per year in before-tax operating costs,mainly labour.The company's marginal tax rate is 40%.What is the cash flow from the project for year 1?
MACRS Depreciation Rates

• A) $90,000
• B) $83,730
• C) $79,331
• D) $71,840
• E) $9,404

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Definitions:

Enhancing Control

Strategies or practices aimed at increasing an individual's authority or influence over their own actions or environment.

Social Support

The perceived or actual assistance and encouragement received from others, which can play a critical role in coping with stress.

Imageability

The ease with which an idea or concept can be visualized or imagined.

Personal Space

The physical area surrounding an individual that is considered personal or private, into which others cannot intrude without causing discomfort.