Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. boynes corporation is considering a capital budget

Boynes Corporation is considering a capital budgeting project that would require investing $200,000 in equipment...

50.1K

Verified Solution

Question

Accounting

Boynes Corporation is considering a capital budgeting project that would require investing $200,000 in equipment with an expected life of 4 years and zero salvage value. Annual incremental sales would be $490,000 and annual incremental cash operating expenses would be $330,000. The project would also require an immediate investment in working capital of $10,000 which would be released for use elsewhere at the end of the project. The project would also require a one-time renovation cost of $70,000 in year 3. The companys income tax rate is 30% and its after-tax discount rate is 14%. The company uses straight-line depreciation. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.

The income tax expense in year 2 is:

Multiple Choice

$12,000

$48,000

$33,000

$21,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Topic: Sulfuric Acid. Disscuss the stregth of the acid, its realtive conductivity, pH, stability of the...

Chemistry
Q

Introduction to Speech Just Need the questions answerd in paraged format. Thanks! Cultural Diversity in the United...

Psychology
Q

What are the three neutron interactions of interest in a fissile environment?

Physics
Q

1) define retrograde motion and explain if it is observed, nightly, weekly, monthly, or on a...

Physics
Q

A soccer ball (mass = 0.450 kg, diameter = 0.70 m) is rolled down a 3.0...

Physics
Q

Describe three ways people can decrease their ecological footprint to help manage Earth s resources

Biology
Q

Two blocks A and B of masses m and 3m are held against a compressed...

Physics
Q

900 9 12 Click the icon to view the partial APR ta monthly payment is...

Basic Math
Q

1 2m 2m 3 47 2r 5 2k 4k 2 m 2m 3 4 4n...

Algebra
Q

Green Thumb Gardening is a small gardening service that uses activity-based costing to estimate costs...

Accounting
Q

Required information Use the following information for the Problems below. (Algo) [The following information applies...

Accounting
Q

A cash budget, by quarters, is given below for a retall company (000 omitted). The...

Accounting