A market research firm with current sales of $750 does not expect any growth in sales for the next two years. The company, however, anticipates that expenses, currently at $160, will increase to $240 next year and to $270 the year after. Assuming a tax rate of 34%, determine the firm’s cash flow in year two. Assume straight line depreciation of $50 each year. Select one: a. ($333.80) b. $389.40 c. ($389.40) d. $333.80 e. $366.00

A market research firm with current sales of $750 does not expect any growth in sales for the next two years. The company, however, anticipates that expenses, currently at $160, will increase to $240 next year and to $270 the year after. Assuming a tax rate of 34%, determine the firm’s cash flow in year two. Assume straight line depreciation of $50 each year. Select one: a. ($333.80) b. $389.40 c. ($389.40) d. $333.80 e. $366.00

EBK CONTEMPORARY FINANCIAL MANAGEMENT

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ISBN:9781337514835

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Chapter10: Capital Budgeting: Decision Criteria And Real Option

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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($333.80)

$389.40

($389.40)

$333.80

$366.00

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Research activities performed to discover the the needs and preferences of consumers and potential consumers. It examines target markets, target audiences, consumer interests, customer feedback, market environment, competitors' positions, etc.. Market research also includes the techniques to develop, launch, and make successful products and services in the market .

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