A Start-Up Firm Is Making an Initial Investment in New

question 2

Multiple Choice

A start-up firm is making an initial investment in new plant and equipment.Assume that currently its equipment must be depreciated on a straight-line basis over 10 years,but Congress is considering legislation that would require the firm to depreciate the equipment over 7 years.If the legislation becomes law,which of the following would occur in the year following the change?

• A)The firm's operating income (EBIT) would increase.
• B)The firm's taxable income would increase.
• C)The firm's cash flow would increase.
• D)The firm's tax payments would increase.
• E)The firm's reported net income would increase.

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Definitions:

Customer Service

The support and assistance provided by a company to those people who buy or use its products or services.

Service Recovery

The actions a company takes to correct a problem that a customer has encountered with its service, aimed at restoring customer satisfaction.

Customer Service

The direct interaction between a consumer making a purchase and a representative of the company that is selling it.

Order Management

The process of tracking and fulfilling sales orders, involving the stages from order receipt, processing, packaging, to shipment and delivery.