A Fast-Food Company Invests $2

question 46

Multiple Choice

A fast-food company invests $2.2 million to buy machines for making slurpees. These can be depreciated using the MACRS schedule shown above. If the cost of capital is 10%, what is the increase in the net present value (NPV) of the product gained by using MACRS depreciation over straight-line depreciation for three years?

• A) $28,559
• B) $47,599
• C) $76,158
• D) $190,321

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Definitions:

Plantar Flexes

The movement decreasing the angle between the dorsum of the foot and the leg, for example, standing on tiptoes.

Fibularis Brevis

A muscle of the lower leg that assists in plantar flexing and everting the foot.

Calf Bulge

The appearance of an enlarged or prominent portion of the calf muscle on the back of the lower leg.

Gastrocnemius

A major muscle in the calf of the leg, involved in walking, running, and jumping.