AOS Industries Statement of Cash Flows for 2008

question 72

Multiple Choice

AOS Industries Statement of Cash Flows for 2008

Consider the above statement of cash flows. In 2008, AOS Industries had contemplated buying a new warehouse for $3 million, the cost of which would be depreciated over 10 years. If AOS Industries has a tax rate of 25%, what would be the impact for the amount of cash held by AOS at the end of the 2008?

• A) It would have $3,000,000 less cash at the end of 2008.
• B) It would have $2,925,000 less cash at the end of 2008.
• C) It would have $1,500,000 less cash at the end of 2008.
• D) It would have an additional $7,500,000 in cash at the end of 2008.

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Definitions:

Intrapreneurship

Refers to the practice of fostering entrepreneurial behavior within an existing organization, allowing employees to pursue innovative ideas or projects with the potential to generate new revenue or improve efficiency.

Innovation

The process of creating new ideas, products, or methods, often leading to improvements or contributing to significant changes in society.

Global Economy

An interconnected marketplace where goods, services, and labor are traded worldwide, and economic events in one part of the world can have an impact on other parts.

Foreign-Owned Company

A business entity that is owned by individuals or corporations from a country different from where the company operates.