CathFoods Will Release a New Range of Candies Which Contain

question 5

Multiple Choice

CathFoods will release a new range of candies which contain anti-oxidants. New equipment to manufacture the candy will cost which will be depreciated by straight-line depreciation over six years. In addition, there will be spent on promoting the new candy line. It is expected that the range of candies will bring in revenues of per year for five years with production and support costs of $1.5 million per year. If CathFoods' marginal tax rate is 35%, what are the incremental earnings in the second year of this project?

• A) $2.492 million
• B) $2.100 million
• C) $3.833 million
• D) $1.342 million

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Definitions:

Positive Reappraisal Strategy

A cognitive coping mechanism involving reinterpretation of a situation in order to see it in a more positive light or to extract positive meaning from it.

Primary Appraisal

Describes the initial evaluation process where a person decides whether a stimulus is a threat, beneficial, or irrelevant to their well-being.

Distress

Extreme anxiety, sorrow, or pain, whether emotional or physical, that affects an individual's level of functioning or well-being.

Stressful Situation

Circumstances or events that induce a state of tension or stress, often requiring adaptation or coping mechanisms.