Ernie's Electrical Is Evaluating a Project Which Will Increase Sales

question 7

Multiple Choice

Ernie's Electrical is evaluating a project which will increase sales by $50,000 and costs by $30,000. The project will cost $150,000 and will be depreciated straight-line to a zero book value over the 10 year life of the project. The applicable tax rate is 34%. What is the operating cash flow for this project?

• A) $3,300
• B) $5,000
• C) $8,300
• D) $13,300
• E) $18,300

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Definitions:

Divorced Parents

Individuals who are legally separated from their spouse, resulting in the termination of their marriage, and who may co-parent their children following the divorce.

Day-Care Center

A facility that provides care and educational activities for children when their parents or guardians are unavailable during the day.

Full-Time Jobs

Employment positions that typically require workers to work a standard workweek, often defined as 35 or more hours per week.

African-Americans

A demographic group in the United States consisting of individuals with partial or total ancestry from any of the black racial groups of Africa.