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What Is the Present Value at a 10 Percent Discount

Question 33

Multiple Choice

What is the present value at a 10 percent discount rate of the depreciation tax shield for a firm in the 35 percent tax bracket that purchases a $50,000 asset being depreciated at 15 percent declining balance with a half-year rule, disposed from the existing asset pool at zero?


A) $10,866
B) $10,023
C) $17,500
D) $37,908

Correct Answer:

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