Income before depreciation and taxes amounts to $167,200. Using straight- line depreciation, the current year's depreciation expense will be $31,200. Using double- declining- balance depreciation, the current year's depreciation expense will be $41,200. Assuming a tax rate of 30%, what is the net cash saved in income taxes by using double- declining- balance depreciation over straight- line depreciation?

Question

Quizplus · Accepted Answer

The Answer of Income before depreciation and taxes amounts to $167,200. Using straight- line depreciation, the current year's depreciation expense will be $31,200. Using double- declining- balance depreciation, the current year's depreciation expense will be $41,200. Assuming a tax rate of 30%, what is the net cash saved in income taxes by using double- declining- balance depreciation over straight- line depreciation?

Income Before Depreciation and Taxes Amounts to $167,200