(Appendix 8C)Strathman 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)$33, 000
B)$48, 000
C)$9, 000
D)$24, 000

Question

(Appendix 8C)Strathman 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)$33, 000 
B)$48, 000 
C)$9, 000 
D)$24, 000

Quizplus · Accepted Answer

Depreciation expense = (Original cost - Salvage value)÷ Useful life
= ($200, 000 - $0)÷ 4 years = $50, 000 per year
 11eaa0c8_96b3_a46b_9cb2_c539808abe38_TB2487_00

(Appendix 8C)Strathman Corporation Has Provided the Following Information Concerning a Capital