Use the Table for the Question(s)below

question 119

Multiple Choice

Use the table for the question(s) below.
AOS Industries Statement of Cash Flows for 2015

-Consider the above statement of cash flows.In 2015,AOS Industries had contemplated buying a new warehouse for $2 million,the cost of which would be depreciated over 10 years.If AOS Industries has a tax rate of 25%,what would be the impact on the amount of cash held by AOS at the the end of the 2015?

• A)It would have $2,00,000 less cash at the end of 2015.
• B)It would have $1,950,000 less cash at the end of 2015.
• C)It would have $150,000 less cash at the end of 2015.
• D)It would have an additional $50,000 in cash at the end of 2015.
• E)It would have $1,800,000 less cash at the end of 2015.

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Definitions:

Security Interest

A legal claim or lien on collateral that secures the performance of an obligation, normally repayment of a loan.

Financing Statement

A document filed by a creditor to indicate a security interest in a debtor's assets, used primarily in secured transactions.

Security Agreement

A formal document granting a creditor a security interest in an identified asset or property, used as collateral for a loan.

Conflicting Security Interests

A situation where multiple parties claim a security interest in the same collateral, potentially leading to disputes over priority and rights.