Use the Following Information to Answer the Following Question(s)

question 48

Multiple Choice

Use the following information to answer the following question(s) .
Delta Inc.is considering the purchase of a new machine which is expected to increase sales by $10,000 in addition to increasing non-depreciation expenses by $3,000 annually.Due to the sales increase,Delta will need to increase working capital by $1,000 at the beginning of the project.Delta will depreciate the machine using the straight-line method over the project's five year life to a salvage value of zero.The machine's purchase price is $20,000.The firm has a marginal tax rate of 34 percent,and its required rate of return is 12 percent.
-The machine's initial cash outflow is

• A)$20,000.
• B)$21,000.
• C)$27,000.
• D)$23,000.

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Definitions:

Abundant Silica

The presence of a high concentration of silicon dioxide in rocks or magma, which affects their viscosity and melting point.

Less Viscous

Refers to a substance's decreased resistance to flow, implying it moves more freely compared to more viscous materials.

Magma Volatile

Gases and other volatile substances that are dissolved in magma and can affect its viscosity and eruption style.

Chemistry

The scientific branch that studies the composition, structure, properties, and change of matter.