Use the Information Below to Answer the Following Questions Depreciation Has Been Calculated on a Straightline Basis

question 40

Multiple Choice

Use the information below to answer the following questions.
Y3 Ltd is expanding its production of binoculars. The plant is expected to cost $750,000, have a life of 5 years, and a nil residual value. It will be ready for operation on 31 December 2017. The following statement of comprehensive income figures for the new binoculars are forecast: $\begin{array}{llllll}&2018 & 2019 & 2020 & 2021 & 2022 \\&\$ \mathrm{~m} & \$ \mathrm{~m} & \$ \mathrm{~m} & \$ \mathrm{~m} & \$ \mathrm{~m}\\\text { Sales } & 1.5 & 1.3 & 1.4 & 1.2 & 1.1 \\\text { Costs (including depreciation) } & 1.0 & 1.0 & 1.0 & 1.0 & 1.0 \\\hline \text { Profit before tax } & \underline{0.5} & 0.3 & 0.4 & 0.2 & 0.1\end{array}$ Depreciation has been calculated on a straightline basis. You should assume that all cash flows occur at the end of the year in which they arise. The company's cost of capital is 10%. Ignore taxation.
-Refer to the table above. The payback period is:

• A)between years 2 and 3.
• B)between years 4 and 5.
• C)between years 3 and 4.
• D)between years 1 and 2.

Use the change-of-base formula to evaluate logarithms.

Apply properties of logarithms to simplify or evaluate expressions.

Understand the dynamics and theories behind the structure of interest rates and yield curves.

Comprehend the distinction between stocks and bonds and the inverse relationship between stock prices and interest rates.

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Definitions:

Ethnic Identity

A person's sense of belonging or identity in relation to the social, cultural, or national group they identify with.

Oppositional Identity

A concept explaining how individuals may define themselves in contrast to societal norms or dominant groups.

Mature Ethnic Identity

The stage at which an individual has explored and fully understands their ethnic background, leading to a strong sense of belonging and acceptance of their cultural heritage.

Antidrug Norms

Societal standards and beliefs that oppose the use of illegal drugs and support behaviors that resist drug use.