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

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Definitions:

Ngo Dinh Diem

Was the first President of South Vietnam, serving from 1955 until his assassination in 1963.

Coup

A sudden and decisive action in politics, especially one resulting in a change of government illegally or by force.

Murdered

The unlawful killing of one human being by another, especially with premeditated malice or as a result of violent crime.

Duong Van Minh

A Vietnamese military officer and politician who played a key role in the events leading up to the fall of Saigon and the end of the Vietnam War, briefly serving as South Vietnam's president in 1975.