A Company Is Planning to Invest in a Project,which Requires

question 102

Multiple Choice

A company is planning to invest in a project,which requires the purchase of capital assets of $200,000 and additional net working capital of $20,000.The assets have a five-year life,a CCA rate of 30 percent,and an expected salvage value of $35,000.The annual costs for the project's operations are $50,000.The company's effective tax rate is 40 percent and the cost of capital is 12 percent.Assume the asset class remains open after the assets are sold.What is the break-even pre-tax annual operating revenue?

• A) $114,907
• B) $38,944
• C) $64,907
• D) $140,384

Identifying the effects of variable costs on the supply curve and production decisions.

Understanding the influence of regulatory penalties on illegal goods’ market prices.

Understand the impact of government policy (e.g., taxation) on market operations and firm behavior.

Analyze the relationship between demand curves and market outcomes.

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Definitions:

Diamond

A precious gemstone made of carbon, known for its exceptional hardness and high refractive index, leading to its notable sparkle.

Queen

A female monarch or the wife of a king, who rules a kingdom or has a high position of authority.

Probability

A measure of the likelihood that an event will occur.

Likely Viewer

An individual or demographic group considered probable to watch a particular show or type of content.