Table 6.4 Mr.Lee Is Considering a Capacity Expansion for His Supermarket.The Annual

question 27

Multiple Choice

Table 6.4
Mr.Lee is considering a capacity expansion for his supermarket.The annual sales projected for the next five years follow.The current capacity is equivalent to $300,000 sales.Assume a 20 percent pretax profit margin.

-Using the information in Table 6.4,if Lee expands the capacity to an equivalent of $360,000 sales now (year 0) ,how much would pretax cash flow in year 1 increase because of this expansion?

• A)less than $3000
• B)more than $3000 but less than $5000
• C)more than $5000 but less than $7000
• D)more than $7000

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Definitions:

Ecotourism

Travel directed towards exotic, often threatened, natural environments, intended to support conservation efforts and observe wildlife.

Self-Sustaining Big Game Parks

Conservation areas designed to maintain ecosystems and wildlife, including large game, without relying on external resources for continuing survival and management.

Indigenous Plants

Plant species that are native to a specific geographical region and have developed naturally without human intervention.

Leisure

Free time when one is not working or attending to other duties, often spent in activities of one's choice for relaxation or enjoyment.