Welsh Corporation's Return on Investment (ROI)on Some New Equipment Was

question 76

Multiple Choice

Welsh Corporation's return on investment (ROI) on some new equipment was 20% using beginning-of-year net book value.The gross book value of the equipment is $250,000.Accumulated depreciation at the beginning of the year was $10,000.This represents one-half year's straight-line depreciation.What is the annual before-tax cash flow from the new equipment?

• A)$68,000.
• B)$60,000.
• C)$48,000.
• D)$20,000.

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Definitions:

Credit Sales

Sales in which the customer is allowed to pay at a later date, typically implicating the extension of credit from the seller to the buyer.

Collections

Collections involve the processes and activities undertaken by a business to pursue and receive payments owed by customers or debtors.

Projected Sales

An estimate of the amount of revenue that a company expects to earn in a future period from selling goods or services.

Sales Estimates

Projections or predictions about the future sales revenue of a business within a certain period, based on historical data, market analysis, and other factors.