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

question 133

Multiple Choice

(Appendix 8C) Foucault Corporation has provided the following information concerning a capital budgeting project: The company's income tax rate is 35% and its after-tax discount rate is 12%.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 income tax expense in year 2 is:

• A)$70, 000
• B)$7, 000
• C)$42, 000
• D)$49, 000

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Definitions:

Herzberg

Refers to Frederick Herzberg, a psychologist who is best known for introducing the two-factor theory of motivation, distinguishing between hygiene factors and motivators.

McClelland's View

refers to David McClelland's theory that human motivation is primarily driven by three needs: achievement, power, and affiliation.

Need for Social Power

The desire to have influence or control over others in social settings or interpersonal relationships.

Successful Executive

Refers to a high-ranking corporate officer who effectively leads, manages, and makes strategic decisions that contribute to the organization's success.