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Marasco Corporation Has Provided the Following Information Concerning a Capital

Question 129

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Marasco Corporation has provided the following information concerning a capital budgeting project: Marasco Corporation has provided the following information concerning a capital budgeting project:   The income tax rate is 30%. The after-tax discount rate is 13%. The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $20,000. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting. Use Exhibit 7B-1 to determine the appropriate discount factor(s)  using table. The net present value of the project is closest to: A)  $91,000 B)  $128,199 C)  $77,650 D)  $48,199 The income tax rate is 30%. The after-tax discount rate is 13%. The company uses straight-line depreciation on all equipment; the annual depreciation expense will be $20,000. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.
Use Exhibit 7B-1 to determine the appropriate discount factor(s) using table.
The net present value of the project is closest to:


A) $91,000
B) $128,199
C) $77,650
D) $48,199

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