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Bonomo Corporation has provided the following information concerning a capital budgeting project: Tax rate 30 % Expected life of the project 4 Investment required in
Bonomo Corporation has provided the following information concerning a capital budgeting project:
| Tax rate | 30 | % | |
| Expected life of the project | 4 | ||
| Investment required in equipment | $ | 66,000 | |
| Salvage value of equipment | $ | 0 | |
| Annual sales | $ | 255,000 | |
| Annual cash operating expenses | $ | 178,500 | |
| One-time renovation expense in year 3 | $ | 26,000 | |
The company uses straight-line depreciation on all equipment.
The income tax expense in year 3 is:
Garrison 16e updates 05-17-2018, 06-15-2018
Multiple Choice
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$9,900
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$7,800
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$4,950
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$10,200
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