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Garage Corporation's Return on Investment (ROI) on Some New Equipment

Question 37

Multiple Choice

Garage Corporation's return on investment (ROI) on some new equipment was 20% using beginning-of-year net book value. The gross book value of the equipment is $250,000. Accumulated depreciation at the beginning of the year was $10,000. This represents one-half year's straight-line depreciation. What is the annual before-tax cash flow from the new equipment?


A) $68,000.
B) $60,000.
C) $48,000.
D) $20,000.

Correct Answer:

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