Computing the Terminal-Year FCF: Miles Cyprus Company Purchased a Truck

question 39

Multiple Choice

Computing the terminal-year FCF: Miles Cyprus Company purchased a truck that currently has a book value of $1,000. If the company sells the truck for $5,000 today, then what is the amount of cash that it will net after taxes if the company is subject to a 30 percent company tax rate?

• A) $1,200
• B) $3,800
• C) $4,000
• D) $5,000

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Definitions:

Source Traits

Fundamental personality traits from which surface traits, observable behaviors, are derived according to trait theory.

Innate

Traits, behaviors, or abilities that are present from birth, not acquired or learned.

Machiavellianism

A personality trait that involves manipulation, deceit, and a lack of morality to achieve one's goals.

Cunning

Exhibiting skill in achieving one's ends by deceit or evasion.