(Appendix 8C)Lastufka Corporation Is Considering a Capital Budgeting Project

question 29

Multiple Choice

(Appendix 8C) Lastufka Corporation is considering a capital budgeting project.The project would require an investment of $240, 000 in equipment with a 4 year expected life and zero salvage value.The company uses straight-line depreciation and the annual depreciation expense will be $60, 000.Annual incremental sales would be $500, 000 and annual incremental cash operating expenses would be $390, 000.The company's income tax rate is 35% and the after-tax discount rate is 8%.The company takes income taxes into account in its capital budgeting.Assume cash flows occur at the end of the year except for the initial investments. The net present value of the project is closest to:

• A)$66, 360
• B)$306, 360
• C)$130, 000
• D)$124, 320

Understand the distinction between the Internet and the World Wide Web.

Comprehend the concept and importance of telecommuting.

Recognize the necessity of multilingual websites for global competitiveness.

Grasp the underlying concept of hypertext and its significance to the WWW structure.

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Definitions:

Earthquake

A sudden and violent shaking of the ground, sometimes causing great destruction, as a result of movements within the earth's crust or volcanic action.

Prohibitively Expensive

Costs that are so high they discourage or prevent an individual or entity from purchasing a service or product or undertaking an action.

Impossibility of Performance

A legal doctrine that releases parties from their contractual obligations when an event occurs that makes performance objectively impossible.

Absconded

To leave hurriedly and secretly, typically to escape from custody or avoid arrest.