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

question 56

Multiple Choice

(Appendix 8C) Battaglia Corporation is considering a capital budgeting project that would require investing $240, 000 in equipment with an expected life of 4 years and zero salvage value.Annual incremental sales would be $620, 000 and annual incremental cash operating expenses would be $460, 000.The project would also require a one-time renovation cost of $80, 000 in year 3.The company's income tax rate is 30% and its after-tax discount rate is 7%.The company uses straight-line depreciation.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 3 is:

• A)$130, 000
• B)$80, 000
• C)$74, 000
• D)$50, 000

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Definitions:

Corporate America

Corporate America is a colloquial term describing the United States’ business sector, particularly large corporations and their practices.

Sexual Coercion

The act of using pressure, alcohol, drugs, or force to have sexual contact with someone against their will.

Unwanted Sexual Attention

Inappropriate and unwelcome behavior of a sexual nature that can create a hostile work environment and cause distress for the recipient.

Gender Harassment

A form of harassment involving unwelcome and demeaning attitudes, behaviors, or actions directed at someone because of their gender.