Charlotte Computer Services Is Considering Purchasing Equipment at $100 000

question 100

Multiple Choice

Charlotte Computer Services is considering purchasing equipment at $100 000. It is anticipated the equipment will have a useful life of five years. It will be depreciated on a straight-line basis. Operating revenue is expected to be $74 000 per annum and operating expenses $25 000 per annum. The equipment is subject to an investment allowance of 10 per cent and the tax rate is 30 per cent. The after-tax hurdle rate is 12 per cent. The reduction in tax due to the investment allowance is:

• A) $10 000.
• B) $3000.
• C) $7000.
• D) $8700.

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Definitions:

Nasogastric Irrigant

A solution used to flush or clear a nasogastric tube, which is a tube inserted through the nose down into the stomach.

Adult Patient

An individual receiving medical care who is beyond the age of adolescence and legally considered an adult in their respective jurisdiction.

Nasogastric (NG) Tube

A flexible tube passed through the nose into the stomach for feeding or medication delivery.

Impaired Swallowing

Difficulty in the passage of solids or liquids from the mouth to the stomach, often referred to as dysphagia.