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Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello
Edition 16ISBN: 978-0077862381Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello
Edition 16ISBN: 978-0077862381 Exercise 56
Effective Interest Rate
One of the advantages of borrowing is that interest is deductible for income tax purposes.
a.f acompany pays 8 percent interest to borrow $500,000, but is inanincome taxbracket that requires it to pay 40 percent income tax, what is the actual net-of-tax interest cost that thecompany incurs
b.hat is the effective interest rate that is paid bythe company
One of the advantages of borrowing is that interest is deductible for income tax purposes.
a.f acompany pays 8 percent interest to borrow $500,000, but is inanincome taxbracket that requires it to pay 40 percent income tax, what is the actual net-of-tax interest cost that thecompany incurs
b.hat is the effective interest rate that is paid bythe company
Explanation
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(a)Amount borrowed 500,000
Rate of inter...
Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello
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