Use the Information for the Question(s)below

question 68

Multiple Choice

Use the information for the question(s) below.
Shepard Industries is evaluating a proposal to expand its current distribution facilities.Management has projected the project will produce the following cash flows for the first two years (in millions) .
-The incremental unlevered net income of the Shepard Industries project in year one is closest to:

• A)$510
• B)$415
• C)$600
• D)$355

---

Definitions:

Annual Capacity

The total output a company can produce in a year using its resources efficiently.

Opportunity Cost

Forgoing the potential gains from various choices by settling on one option.

Supplying Division

The unit or segment within a larger organization responsible for providing materials, products, or services to another division or department.

Transfer Price

The price charged for goods and services transferred between departments or divisions of the same company or between related entities.