
Accounting for Decision Making and Control 8th Edition by Jerold Zimmerman
النسخة 8الرقم المعياري الدولي: 978-0078025747
Accounting for Decision Making and Control 8th Edition by Jerold Zimmerman
النسخة 8الرقم المعياري الدولي: 978-0078025747 تمرين 6
Depreciation Tax Shield
An investment project involves the purchase of equipment at a cost of $100 million. For tax purposes, the equipment has a life of five years and will be depreciated on a straight-line basis. Inflation is expected to be 5 percent and the real interest rate is 5 percent. The tax rate is 40 percent.
What is the present value of the depreciation tax shield for the machine?
Source: R. Watts.
An investment project involves the purchase of equipment at a cost of $100 million. For tax purposes, the equipment has a life of five years and will be depreciated on a straight-line basis. Inflation is expected to be 5 percent and the real interest rate is 5 percent. The tax rate is 40 percent.
What is the present value of the depreciation tax shield for the machine?
Source: R. Watts.
التوضيح
Depreciation
It is the reduction in the...
Accounting for Decision Making and Control 8th Edition by Jerold Zimmerman
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