Question: QUESTION 2 XYZ is evaluating the claw machine project. During year 1, the claw machine project is expected to have relevant revenue of $95,000, relevant

 QUESTION 2 XYZ is evaluating the claw machine project. During year

QUESTION 2 XYZ is evaluating the claw machine project. During year 1, the claw machine project is expected to have relevant revenue of $95,000, relevant variable costs of $30,000, and relevant depreciation of 50. In addition, XYZ would have one source of fixed costs associated with the claw machine project. Yesterday, XYZ signed a deal with Ruby Marketing to develop a marketing campaign for use in the project. The terms of the deal require XYZ to pay Ruby Marketing either $15,000 in 1 year if the project is pursued or $20,000 in 1 year if the project is not pursued. Relevant net income for the claw machine project in year 1 is expected to be $36,000. What is the tax rate expected to be in year 12 a. A rate less than 40.00% or a rate equal to or greater than 60.00% O b. A rate equal to or greater than 40.00% but less than 45.00% c. A rate equal to or greater than 45.00% but less than 50.00% O d. Arate equal to or greater than 50.00% but less than 55.00% e. A rate equal to or greater than 55.00% but less than 60.00% QUESTION 3 XYZ is considering buying a new, high efficiency interception system. The new system would be purchased today for $46,000. It would be depreciated straight-line to 50 over 2 years. In 2 years, the system would be sold for an after-tax cash flow of $13,000. Without the system, costs are expected to be $100,000 in 1 year and $100,000 in 2 years. With the system, costs are expected to be $75,000 in 1 year and $65,000 in 2 years. If the tax rate is 50% and the cost of capital is 8.3%, what is the net present value of the new interception system project? a. $11,970 (plus or minus $50) b. $16,103 (plus or minus $50) c. $886 (plus or minus 550) d.$47,843 (plus or minus $50) e. None of the above is within 550 of the correct answer Save All Answers Click Save and Submit to save and submit. Click Save All Answers to save all answers

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