(Converted to sequential multiple choice) The statement of facts for 29-32 is as follows: (Two points each): Paro Detective Supply, Inc., an accrual basis taxpayer, reports the following for the last completed calendar year. The following questions concern the computation of taxable income of this taxpayer. Net income from sales $62,000 Municipal bond interest this year 3,500 Prepaid rent income for the next year received in the last completed year 2,500 Dividend from less than 20% owned corporation 6,000 Net capital loss (3,000) Federal income tax 10,500 MACRS depreciation 19,600 Charitable contribution - cash 10,000 Municipal bond interest is:

Sailcloth & more currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. the company owns land beside its current manufacturing facility that could be used for the expansion. the company bought this land 5 years ago at a cost of $319,000. at the time of purchase, the company paid $24,000 to level out the land so it would be suitable for future use. today, the land is valued at $295,000. the company has some unused equipment that it currently owns valued at $38,000. this equipment could be used for producing awnings if $12,000 is spent for equipment modifications. other equipment costing $490,000 will also be required. what is the amount of the initial cash flow for this expansion project?