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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. $53,700
B. $64,200
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
Which technology can be used to rate data fidelity and to provide an authenticated hash for data?
A. file analysis
B. signature updates
C. network blocking
D. file reputation
Answer: D
Explanation:
Explanation/Reference:
Explanation:
File analysis rate data fidelity to provide an authenticated hash for data.
Reference: http://www.cisco.com/c/en/us/td/docs/security/ips/7-1/configuration/guide/idm/idmguide71/
idm_collaboration.html
NEW QUESTION: 3
A. Option D
B. Option A
C. Option B
D. Option C
Answer: D