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

question 141

Multiple Choice

(Appendix 8C) Dekle Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment.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 total cash flow net of income taxes in year 2 is:

• A)$72, 000
• B)$90, 000
• C)$18, 000
• D)$60, 000

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Definitions:

Unknown Parameters

Quantities in a statistical model that are not known a priori but are estimated from data.

P-values

The probability of observing a statistic as extreme as, or more extreme than, the statistic observed under the assumption that the null hypothesis is true.

Two-sided

Pertaining to hypothesis tests that consider deviations in both directions away from a specified null hypothesis.

One-sided

A term used in hypothesis testing to describe a test where the alternative hypothesis specifies a direction of the difference or effect.