Ben's Border Café Is Considering a Project Which Will Produce

question 98

Multiple Choice

Ben's Border Café is considering a project which will produce sales of $16,000 and increase cash expenses by $10,000. If the project is implemented,taxes will increase from $23,000 to $24,500 and depreciation will increase from $4,000 to $5,500. What is the amount of the operating cash flow using the top-down approach?

• A) $4,000
• B) $4,500
• C) $6,000
• D) $7,500
• E) $8,500

Differentiate between various capital budgeting techniques and understand their usage in practice.

Understand the concept and calculation issues related to conventional cash flows.

Grasp the importance of using multiple evaluation methods for comprehensive project analysis.

Understand the principles of discounted cash flow (DCF) valuation.

---

Definitions:

Diversion Program

In some jurisdictions, an alternative to prosecution that is offered to certain felony suspects to deter them from future unlawful acts.

Felony Suspects

Individuals suspected of committing a serious crime, classified as a felony, which is typically punishable by imprisonment or death.

Procedural Steps

A series of actions or operations conducted in a proper sequence to achieve a legal or regulatory outcome.

Criminal Case

Legal proceedings brought by the state against an individual or entity accused of committing a crime.