Use the Information Below to Answer the Following Questions Depreciation Has Been Calculated on a Straightline Basis

question 62

Multiple Choice

Use the information below to answer the following questions.
Y3 Ltd is expanding its production of binoculars. The plant is expected to cost $750,000, have a life of 5 years, and a nil residual value. It will be ready for operation on 31 December 2017. The following statement of comprehensive income figures for the new binoculars are forecast: $\begin{array}{llllll}&2018 & 2019 & 2020 & 2021 & 2022 \\&\$ \mathrm{~m} & \$ \mathrm{~m} & \$ \mathrm{~m} & \$ \mathrm{~m} & \$ \mathrm{~m}\\\text { Sales } & 1.5 & 1.3 & 1.4 & 1.2 & 1.1 \\\text { Costs (including depreciation) } & 1.0 & 1.0 & 1.0 & 1.0 & 1.0 \\\hline \text { Profit before tax } & \underline{0.5} & 0.3 & 0.4 & 0.2 & 0.1\end{array}$ Depreciation has been calculated on a straightline basis. You should assume that all cash flows occur at the end of the year in which they arise. The company's cost of capital is 10%. Ignore taxation.
-Refer to the table above. The annual cash outflow for the project is:

• A)$700,000.
• B)$850,000.
• C)$750,000.
• D)$650,000.

---

Definitions:

Ethnicity

A social construct defining groups of people based on shared cultural, linguistic, or ancestral traits.

Social Experiences

Social experiences encompass the interactions and relationships an individual has within a society, shaping their personal development and social identity.

Minority Group

A group of people who, because of their physical or cultural characteristics, are singled out from the others in the society in which they live for differential and unequal treatment.

Racial

Pertaining to race, often relating to the classification of humans into groups based on physical traits, ancestry, genetics, or social relations.