Last year Almazan Software reported $10.500 million of sales,$6.250 million of operating costs other than depreciation,and $1.300 million of depreciation.The company had $5.000 million of bonds that carry a 6.5% interest rate,and its federal-plus-state income tax rate was 35%.This year's data are expected to remain unchanged except for one item,depreciation,which is expected to increase by $0.310 million.By how much will net income change as a result of the change in depreciation? The company uses the same depreciation calculations for tax and stockholder reporting purposes.(Round your final answer to 3 decimal places. )

Question

Quizplus · Accepted Answer

This problem can be worked very easily - just multiply the increase in depreciation by (1-T)to get the decrease in net income: 11ea856c_8bfd_ce53_9aec_79cf36917b52_TB1222_00 We can also get the answer a longer way,which explains things more clearly: 11ea856c_8bfd_f564_9aec_8751110b63e1_TB1222_00

Last Year Almazan Software Reported $10