Fool Proof Software Is Considering a New Project Whose Data

question 39

Multiple Choice

Fool Proof Software is considering a new project whose data are shown below.The equipment that would be used has a 3-year tax life.Under the new tax law,the equipment used in the project is eligible for 100% bonus depreciation,so it will be fully depreciated at t = 0.Revenues and operating costs are expected to be constant over the project's 10-year expected life.What is the Year 1 cash flow?

• A) $33,177
• B) $22,409
• C) $48,750
• D) $26,483
• E) $22,991

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Definitions:

Formation Of Contract

The legal process by which an agreement between parties becomes legally enforceable, usually involving offer, acceptance, consideration, and mutual intent.

Offer And Acceptance

The fundamental components of a contract where one party makes an offer and the other accepts, creating a legally binding agreement.

Consideration

A value (such as money, service, or goods) exchanged between parties in a contract, making the agreement legally binding.

Fairness

The quality of being impartial, just, and equitable in decisions and actions.