Use the Following Information to Answer the Next Question(s)

question 28

Multiple Choice

Use the following information to answer the next question(s) .
Sunny Flowers is considering the purchase of a small business that costs $500,000. Sunny plans to sell stock valued at $250,000. The stock would pay dividends of $20,000 per year. Sunny would borrow the remaining $250,000 from a local bank at 12 percent interest.
The business is expected to generate annual cash inflows of $80,000. Duane plans to operate the business for 15 years and then turn it over to his son.
-Miller Manufacturing has acquired a new parcel van to transport packages from the airport to its sales offices for $20,000. The van is a class 10 item which has a capital cost allowance rate of 30%. The company plans to use the van for five years and then sell it for an expected salvage value of $4,000. The capital cost allowance for the first year would be

• A) $3,000.
• B) $6,000.
• C) $5,100.
• D) $3,500.

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Definitions:

Supply Curve

A graphical representation that shows the relationship between the price of a good and the quantity of the good that producers are willing and able to sell.

Carrots

In a metaphorical sense, incentives or rewards used to motivate behavior; in a literal sense, a root vegetable typically orange in color.

Supply Curve

A graph showing the relationship between product price and quantity of product that a seller is willing and able to supply.

Quantity Supplied

The amount of a certain good or service that producers are willing to supply at a given price.