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Multiple Choice Identify the choice that best completes the statement or answers the question. Outback Beverages is considering a project for a new beverage called
Multiple Choice Identify the choice that best completes the statement or answers the question. Outback Beverages is considering a project for a new beverage called Koala-Kola. The project would require new assets today costing $200,000 that would be written off immediately under the new (2018) tax laws since Outback anticipates having enough other income to write this cost off against. Additional net working capital of $10,000 would be needed at the beginning of the project's life. The project has a 4-year expected useful life with an expected salvage valuc of $50,000 and a book value of zero at the end of the 4-year expected useful life. Outback expects Koala-Kola annual sales of $90.000 and annual operating costs of 30,000 during the 4-year life of the project. Outback Beverages marginal tax rte is 25% andtheir AC . What is the total year 4 (operating plus terminal) cash flow for the Koala-Kola project? 1) SA. $82,500 DB. $95,000 -21000050,000-Joo00x02st 60000 ! C. $105,000 1 0,000-30,000- Koala-Kola project? 2) What is the initial outlay for thel A. $210,000 B. $150,000 C. $200,000 D. $160,000. 0.2y
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