Chp 10 Finance Quiz 1

Chp 10 Finance Quiz 1 - Question 1 1. A company that...

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Question 1 1. A company that utilizes the MACRS system of depreciation: Answer will have equal depreciation costs each year of an asset's life. will have a greater tax shield in year two of a project than it would have if the firm had opted for straight-line depreciation, given the same depreciation life. can depreciate the cost of land, if it so desires. will expense less than the entire cost of an asset. cannot expense any of the cost of a new asset during the first year of the asset's life. 0.1 points Question 2 1. Jefferson & Sons is evaluating a project that will increase annual sales by $138,000 and annual costs by $94,000. The project will initially require $110,000 in fixed assets that will be depreciated straight-line to a zero book value over the 4-year life of the project. The applicable tax rate is 32 percent. What is the operating cash flow for this project? Answer $11,220 $29,920 $38,720 $46,480 $46,620 0.1 points Question 3 1. Your firm is contemplating the purchase of a new $1,628,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5-year life. It will be
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This note was uploaded on 07/31/2011 for the course FIN 550 taught by Professor Rajneeshsharma during the Summer '11 term at Saint Joseph's University.

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Chp 10 Finance Quiz 1 - Question 1 1. A company that...

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