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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 third year that Moore Corporation should use in a capital budgeting
analysis?
A. $64,200
B. $53,700
C. $47,400
D. $68,400
Answer: D
Explanation:
Choice "a" is correct. $68,400 net cash flow for the third year.
Alternate Computation:
In year 3, 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 BEFORE the
depreciation tax shield is considered. Depreciation is not a cash outflow, but it will reduce the amount of
tax the company has to pay (by 40% of the depreciation), and this has an effect on the cash-flow for the
company. Depreciation, as calculated above, is $21,000 per year ($105,000 cost of the machine divided
by 5 years). The depreciation tax shield is $8,400 ($21,000 * 40%), so the total after-tax cash flows in
year 3 for the new machine is $60,000 + $8,400 = $68,400.
NEW QUESTION: 2
A. Option C
B. Option E
C. Option B
D. Option D
E. Option A
Answer: A,C
NEW QUESTION: 3
Which of the following components of AWS Data Pipeline specifies the business logic of your data management?
A. Pipeline definition
B. AWS Direct Connect
C. Task Runner
D. Amazon Simple Storage Service 9Amazon S3)
Answer: A
Explanation:
Explanation
A pipeline definition specifies the business logic of your data management.
References:
NEW QUESTION: 4
Which security capability of AIX allows for improved efficiency, reduced administration costs and better adherence to business audit guidelines by allowing administrative tasks to be delegated to non-root users?
A. AIX Security Expert
B. Resource Access Control Facility
C. Filesystem Permissions Tool
D. Role Based Access Control
Answer: D