9s. 8 Omar Shipping Company bought a tugboat for $75,000 (year 0) and expected to use it for five years after which it will be sold for $12,000. Suppose the company estimates the following revenues and expenses from the tugboat investment for the first operating year: Operating revenue $200,000 Operating expenses $84,000 Depreciation $4,000 If the company pays taxes at the rate of 30% on its taxable income, what is the net income during the first year? a. $28,700 b. $81,200 c. $78,400 d. $25,900

9s. 8 Omar Shipping Company bought a tugboat for $75,000 (year 0) and expected to use it for five years after which it will be sold for $12,000. Suppose the company estimates the following revenues and expenses from the tugboat investment for the first operating year: Operating revenue $200,000 Operating expenses $84,000 Depreciation $4,000 If the company pays taxes at the rate of 30% on its taxable income, what is the net income during the first year? a. $28,700 b. $81,200 c. $78,400 d. $25,900

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 1PROB

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