Use the Table for the Question(s)below

question 19

Multiple Choice

Use the table for the question(s) below.

-Visby Rides,a livery car company,is considering buying some new luxury cars.After extensive research,they come up with the above estimates of free cash flow from this project.The cars belong to asset class 10 and have a capital cost allowance (CCA) rate of 30%.What is the net present value (NPV) of the project,given that the cost of capital is 10%,and the company faces a marginal tax rate of 25%?

• A)$66,373
• B)$78,564
• C)$118,580
• D)$151,142
• E)$167,549

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Definitions:

Legal Consulting Partnership

A business arrangement in which lawyers offer advice and expertise in specific legal areas to clients, sharing profits and liabilities.

Jointly Liable

A legal term indicating that two or more parties are fully responsible for fulfilling an obligation or paying off a debt.

Bank Loans

Financial borrowings from a bank that need to be repaid with interest.

Partnership

A business structure where two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Deed.