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

question 101

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 2, the incremental depreciation expense for year 2 is ________. (See Table 11.2)

• A) $16,800
• B) $26,400
• C) $38,400
• D) $60,000

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Definitions:

Performance Norm

This is a standard or expectation within a group or organization that establishes the level of work effort and output that is typical or acceptable.

Productivity Norm

A standard or benchmark for the amount of work or output that should be achieved by a worker or group within a certain time frame.

Membership Characteristics

The traits and attributes that define the identity and inclusion criteria of a group or organization.

Culturally Diverse

Describes a group or setting that includes individuals from a wide range of ethnic, cultural, and social backgrounds.