Pilot Company Will Purchase a Truck for $80,000

question 2

Multiple Choice

Pilot Company will purchase a truck for $80,000.The truck's depreciable life is 5 years.The truck has no terminal salvage value.Assume a tax rate of 30% and a required after-tax rate of return of 12%.The company uses the straight-line method of depreciation for tax purposes.What is the annual after-tax cash flow from depreciation expense?

• A) $4,800 cash outflow
• B) $4,800 cash inflow
• C) $11,200 cash outflow
• D) $11,200 cash inflow

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Definitions:

Remarriages

The act of marrying again after a previous marriage has ended, either by divorce or the death of a spouse.

Cohabitation

Sharing a living space and a romantic relationship without the legal or religious ceremony of marriage.

Stepfamilies

Families formed when one or both partners in a marriage or committed relationship have children from a previous relationship.

Flexibility

The ability to adapt to new, different, or changing requirements.