A company purchased an asset for $3,250,000 that will be used in a 3-year project. The asset is in the 3-year MACRS class. The depreciation percentage each year is 33.33 percent, 44.45 percent, and 14.81 percent, respectively. What is the book value of the equipment at the end of the project?

Multiple Choice

• $722,150

• $0

• $3,009,175

• $240,825

• $2,166,775

Kelley's Baskets makes handmade baskets and is currently considering making handmade wreaths as well. Which one of the following is the best example of an incremental operating cash flow related to the wreath project?

Multiple Choice

• Utilizing the basket manager to oversee wreath production

• Hiring additional employees to handle the increased workload should the firm accept the wreath project

• Planning on lower interest expense by assuming the proceeds of the wreath sales will be used to reduce the firm's currently outstanding debt

• Storing supplies in the same space currently used for materials storage

• Researching the market to determine if wreath sales might be profitable before deciding to proceed