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NEW QUESTION: 1
The Moore Corporation is considering the acquisition of a new machine. The machine can be purchased
for $90,000; it will cost $6,000 to transport to Moore's plant and $9,000 to install. It is estimated that the
machine will last 10 years, and it is expected to have an estimated salvage value of $5,000. Over its
1 0-year life, the machine is expected to produce 2,000 units per year with a selling price of $500 and
combined material and labor costs of $450 per unit. Federal tax regulations permit machines of this type
to be depreciated using the straight-line method over 5 years with no estimated salvage value. Moore has
a marginal tax rate of 40 percent.
What is the net cash flow for the tenth year of the project that Moore Corporation should use in a capital
budgeting analysis?
A. $81,000
B. $60,000
C. $68,400
D. $63,000
Answer: D
Explanation:
Choice "c" is correct. $63,000 net cash flow for the tenth year.
Alternate Computation:
In year 10, Moore will generate a $100,000 profit from the incremental sales (2000 units * ($500 -$450)).
This profit will be taxed at 40%, so the net after-tax increase in cash flow is $60,000. The machine is fully
depreciated in year 10 because it was depreciated over a 5-year life. The tax basis of the machine is zero
on the date Moore receives a $5,000 salvage value for the machine. The gain on the machine of $5,000
($5,000 SV $0 Basis) is taxed at 40%, or $2,000 in total tax outflow for the gain, so the net inflows on the
salvage is $3,000. Therefore, the total after-tax cash flows in year 10 for the new machine is $60,000 +
$ 3,000 = $63,000.
NEW QUESTION: 2
As shown in the following topology, establish a phase relationship, and receive the AS400 AS100 1.1.1.1/32
AS-Path routing network. What is the attribute?
A. 300 200 100
B. 100 200 300
C. 100 200 300 400
D. 400 300 200 100
Answer: A
NEW QUESTION: 3
A list report includes columns for purchase requests and regional cost centers. A manager wants the report to
-how the total number of purchase requests for each of the regional cost centers.
I low do you configure the report definition?
A. Filter the results so that only cost center and purchase requests are included in the report.
B. Use the purchase requests column to group the cost centers.
C. Summarize the regional cost centers by count.
D. Summarize the purchase requests column by count.
Answer: D
NEW QUESTION: 4
A. Option B
B. Option A
Answer: B
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