(Appendix 8C)Blier Corporation has provided the following information concerning a capital budgeting project: The company uses straight-line depreciation on all equipment. The income tax expense in year 2 is:
A)$17, 500
B)$3, 500
C)$35, 000
D)$21, 000

Question

(Appendix 8C)Blier Corporation has provided the following information concerning a capital budgeting project:  The company uses straight-line depreciation on all equipment. The income tax expense in year 2 is:
A)$17, 500 
B)$3, 500 
C)$35, 000 
D)$21, 000

Quizplus · Accepted Answer

Depreciation expense = (Original cost - Salvage value)÷ Useful life
= ($160, 000 - $0)÷ 4 years = $40, 000 per year
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(Appendix 8C)Blier Corporation Has Provided the Following Information Concerning a Capital