Table 6.4 Mr.Lee Is Considering a Capacity Expansion for His Supermarket.The Annual

Multiple Choice

Table 6.4
Mr.Lee is considering a capacity expansion for his supermarket.The annual sales projected for the next five years follow.The current capacity is equivalent to $300,000 sales.Assume a 20 percent pretax profit margin.

-Using the information in Table 6.4,if Lee expands the capacity to an equivalent of $360,000 sales now (year 0) ,how much would pretax cash flow in year 5 increase because of this expansion?

A) less than $7000
B) more than $7000 but less than $10,000
C) more than $10,000 but less than $13,000
D) more than $13,000