Helfen Corporation Has Provided the Following Information Concerning a Capital

question 91

Multiple Choice

Helfen 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 13%. 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)$56,000
• B)$70,000
• C)$14,000
• D)$40,000

---

Definitions:

Harmful Algal Blooms

Overgrowths of algae in water that can produce dangerous toxins, negatively affecting aquatic life, pets, and people, and harming the environment.

Nitrate

A compound containing nitrogen and oxygen, commonly found in fertilizers, and can lead to environmental concerns such as water pollution and eutrophication when present in high levels.

Phosphate

A salt or ester of phosphoric acid, commonly used in fertilizers, detergents, food additives, and for water treatment.

Degradable Wastes

Wastes that can break down into less harmful components over time through biological processes.