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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Frontal Lobe

The part of the brain involved in decision making, problem solving, control of purposeful behaviors, consciousness, and emotions.

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The act of violating established guidelines, norms, or laws.

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