Corporation bought a piece of equipment

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Reference no: EM131343730

1. Three years ago a corporation bought a piece of equipment for $250,000, which required a one-time working capital expense of $15,000. The equipment has two more years of useful life, but the firm is able to sell the equipment for $15,00, which is well below its current book value based on a ive-year straight line depreciation method. Given that the firm's marginal corporate tax rate is 34%, what is the terminal cash flow for this equipment?

A. 28,900

B. 58,900

C. 30,000

D. 43,900

2. A firm has the opportunity to invest in a start-up solar company, a new cell phone technology, or the latest in television screen. These options are BEST described as _____projects.

A. replacement

B. independent

C. mutually exclusive

D. scaled back

Reference no: EM131343730

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