Use the Table for the Question(s)below

question 14

Multiple Choice

Use the table for the question(s) below.
-Consider the above statement of cash flows. In 2018, 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 for the amount of cash held by AOS at the end of 2018?

• A)It would have $150 000 less cash at the end of 2018.
• B)It would have $2 000 000 less cash at the end of 2018.
• C)It would have $1 950 000 less cash at the end of 2018.
• D)It would have an additional $50 000 in cash at the end of 2018.

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Definitions:

Coupon Rate

The annual interest rate paid by a bond relative to its face or par value, which the bondholder receives.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically with fixed dividends.

Tax Considerations

The factors concerning the tax implications of any financial decision, investment strategy, or transaction, which can affect the overall benefit or cost to an individual or business.

Risk Tolerance

An individual's or financial entity's capacity to endure loss or volatility in investment value while attempting to achieve investing goals.