Consider the following income statement: $$\begin{array} { l r }
\text { Sales } & \$ 510,944 \
\text { Costs } & 332,416 \
\text { Depreciation } & 77,300 \
\text { EBIT } & ? \
\text { Taxes } ( 32 \% ) & ? \
\text { Net income } & ? \
\hline
\end{array}$$ What is the amount of the depreciation tax shield?

Question

Consider the following income statement: $$\begin{array} { l r } 
\text { Sales } & \$ 510,944 \
\text { Costs } & 332,416 \
\text { Depreciation } & 77,300 \
 \text { EBIT } & ? \
\text { Taxes } ( 32 \% ) & ? \
 \text { Net income } & ? \
\hline
\end{array}$$ What is the amount of the depreciation tax shield?

Quizplus · Accepted Answer

Depreciation tax shield = $77,300 × .32 = $24,736

Consider the Following Income Statement What Is the Amount of the Depreciation Tax Shield? A)$23,607

Consider the Following Income Statement What Is the Amount of the Depreciation Tax Shield?
A)$23,607