Boch Corporation Has Provided the Following Information Concerning a Capital

question 58

Multiple Choice

Boch Corporation has provided the following information concerning a capital budgeting project:

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 total cash flow net of income taxes in year 2 is:

• A)$90,000
• B)$103,000
• C)$27,000
• D)$130,000

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Definitions:

Transportation

The shipment of products to buyers.

Warehousing

The design and operation of facilities to receive, store, and ship products.

Promotion Mix

The blend of different marketing methods used by a business, such as advertising, sales promotion, public relations, and direct marketing.

Publicity

Nonpersonal communication transmitted through the mass media but not paid for directly by the firm.