(Appendix 8C)Darnold Corporation Has Provided the Following Information Concerning a Capital

question 79

Multiple Choice

(Appendix 8C) Darnold Corporation has provided the following information concerning a capital budgeting project: The equipment will have a 4 year expected life and zero salvage value.The company's income tax rate is 35% and the after-tax discount rate is 9%.The company uses straight-line depreciation on all equipment;the annual depreciation expense will be $10, 000.Assume cash flows occur at the end of the year except for the initial investments.The company takes income taxes into account in its capital budgeting. The net present value of the project is closest to:

• A)$74, 497
• B)$57, 170
• C)$34, 497
• D)$52, 000

---

Definitions:

Explicit Knowledge

Information or knowledge that is easily articulated, written, or shared, often in a formal language or system.

Implicit Knowledge

Knowledge that is acquired and applied without conscious awareness, often in the form of skills or learned behaviors.

Adapting Technologies

The process of modifying existing technologies or adopting new ones to better suit the changing needs and objectives of a business or society.

Certainty

The state of being completely confident or having no doubt about something.