Foucault Corporation Has Provided the Following Information Concerning a Capital

question 144

Multiple Choice

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 3 is:

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

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Definitions:

Pairs

Groupings of two related or associated items, often used to study comparisons or contrasts.

Sperm Cells

Male reproductive cells, which contribute half of the genetic material necessary for fertilization of an ovum.

Threadlike Structure

Thin, elongated formations typically found in biological organisms, such as the strands of DNA or muscle fibers.

Chromosome

A threadlike structure made up of genes. In humans, there are 46 chromosomes in every cell except sperm and ova.