A Firm Is Considering a New Project That Will Generate

question 31

Multiple Choice

A firm is considering a new project that will generate cash revenue of $1,000,000 and cash expenses of $700,000 per year for five years.The equipment necessary for the project will cost $200,000 and will fall under asset class 43 with a CCA rate of 30%.What is the expected free cash flow in the second year of the project if the firm's marginal tax rate is 35%?

• A)$195,000
• B)$162,500
• C)$212,850
• D)$245,000
• E)$161,850

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Definitions:

Developing Countries

Nations with a lower level of industrialization, lower standards of living, and lower Human Development Index (HDI) compared to developed countries.

Women Employment

The participation of women in the workforce, contributing to various sectors and roles across the economy.

Low-Income Countries

Nations with a gross national income (GNI) per capita significantly lower than the global average.

Illiterate

The condition of being unable to read or write, affecting a person's ability to fully participate in society and the economy.