Freiman Corporation Is Considering Investing in a Project That Would

question 64

Multiple Choice

Freiman Corporation is considering investing in a project that would have a 4 year expected useful life. The company would need to invest $160,000 in equipment that will have zero salvage value at the end of the project. Annual incremental sales would be $390,000 and annual cash operating expenses would be $270,000. In year 3 the company would have to incur one-time renovation expenses of $70,000. Working capital in the amount of $10,000 would be required. The working capital would be released for use elsewhere at the end of the project. The company uses straight-line depreciation on all equipment. The income tax expense in year 2 is:

• A)$24,000
• B)$21,000
• C)$36,000
• D)$3,000

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Definitions:

Therapeutic Approach

A method or strategy employed in counseling or therapy to treat psychological disorders and improve mental health through specific techniques and interventions.

Clinical Psychologist

A professional in psychology who diagnoses and treats mental, emotional, and behavioral disorders through therapeutic means.

Self-Fulfillment

The achievement of one's own potential or the realization of one's personal goals and desires.

Carl Rogers

was an influential American psychologist who developed client-centered therapy and emphasized the importance of the self and the actualizing tendency in human beings.