Q24.

Q25.

24 The Terme Corporation is contemplating the purchase of new equipment, which may potentially increase revenues by 30%. Currently, sales are $740,000 per year and cost of sales are 65% of sales. The equipment is expected to last for 4 years with no residual value. The cash outflow expected at the beginning of the year is $285,600. What is the amount of depreciation deduction the company could expense annually assuming the straight-line depreciation method is used? eBook Multiple Choice $71,400 O $92,500 O $46,410 $24,990 25 The Terme Corporation is contemplating the purchase of new equipment, which may potentially increase revenues by 35%. Currently, sales are $650,000 per year and cost of sales are 65% of sales. The equipment is expected to last for 4 years with no residual value. The cash outflow expected at the beginning of the year is $282,000. Ignoring income taxes, what is the estimated annual net operating income increase/decrease? eBook Multiple Choice $9,125 increase $227,500 increase $70,500 decrease $79,625 decrease