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quiz_ch10 - Quiz4 chapter 10 Name Section you are...

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Quiz4: chapter 10 Name __________________________ Section you are registered for ___________ 1. You spent $600 last week repairing the brakes on your car. Now, the starter is acting up and you are trying to decide whether to fix the starter or trade the car in for a newer model. In analyzing the starter situation, the $600 you spent fixing the brakes is a(n) _____ cost. a. opportunity c. incremental e. sunk b. fixed d. erosion 2. Superior Manufacturers is considering a 3-year project with an initial cost of $846,000. The project will not directly produce any sales but will reduce operating costs by $295,000 a year. The equipment is depreciated straight-line to a zero book value over the life of the project. At the end of the project the equipment will be sold for an estimated $30,000. The tax rate is 34 percent. What is the after tax salvage?
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