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Magellen Industries Is Analyzing a New Project

Question 255

Multiple Choice

Magellen Industries is analyzing a new project. The data they have gathered to date is as follows: Magellen Industries is analyzing a new project. The data they have gathered to date is as follows: Initial requirement for equipment: $120,000 Depreciation: Straight-line to zero over the four-year life of the project with no salvage value. Required rate of return: 15% Marginal tax rate: 35% What is the variable cost under the best-case scenario? A) $45,600 B) $50,400 C) $53,200 D) $56,000 E) $58,800 Initial requirement for equipment: $120,000
Depreciation: Straight-line to zero over the four-year life of the project with no salvage value.
Required rate of return: 15%
Marginal tax rate: 35%
What is the variable cost under the best-case scenario?


A) $45,600
B) $50,400
C) $53,200
D) $56,000
E) $58,800

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