Unique Style Inc

question 93

Multiple Choice

Unique Style Inc.is considering a five-year expansion project that requires an initial investment of $500,000 for the purchase of a new machine with a CCA rate of 30 percent.The projected sales revenue and related costs are $450,000 and $180,000 per year,respectively.The project's fixed costs are an additional $48,000 per year.The appropriate discount rate is 8 percent.The firm's marginal tax rate is 40 percent.What is the after-tax cash flow in year three?

• A) $162,600
• B) $168,900
• C) $191,400
• D) $197,700

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Definitions:

Trade Agreement

A formal accord between two or more nations that determines the rules of trade, including tariffs and duties, between them.

World Price

The price of a good or service in the international market, often used as a benchmark for comparing domestic prices.

International Trade

International trade involves the exchange of goods and services across international borders, allowing countries to expand their markets and pursue competitive advantages.

Tariffs

Taxes imposed by a government on imported goods and services to restrict imports or generate revenue.