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

question 68

Multiple Choice

(Appendix 8C) Shinabery 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 9%.The working capital would be required immediately and would be released for use elsewhere at the end of the 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 income tax expense in year 2 is:

• A)$14, 000
• B)$3, 500
• C)$7, 000
• D)$10, 500

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Definitions:

Peribrachial Area

Cholinergic nucleus in the dorsal brainstem having a role in R-sleep behaviors; projects to medial pontine reticular formation.

Microsleep

Brief sleep period lasting a second or so.

Sporadic Napping

The act of taking short, unplanned periods of sleep at irregular intervals.

Pseudocoma

A condition in which an individual appears to be in a coma but is actually aware and conscious.