A firm will depreciate a computer costing $10,000 over five years using the straight-line methods for financial reporting.For tax purposes,the company will use an accelerated method as follows:

Assuming a tax rate of 40 percent,what is the relevant cash flow for present value analysis associated with the tax savings related to depreciation for Year 2?

Question

A firm will depreciate a computer costing $10,000 over five years using the straight-line methods for financial reporting.For tax purposes,the company will use an accelerated method as follows:

Assuming a tax rate of 40 percent,what is the relevant cash flow for present value analysis associated with the tax savings related to depreciation for Year 2?

Quizplus · Accepted Answer

The Answer of A firm will depreciate a computer costing $10,000 over five years using the straight-line methods for financial reporting.For tax purposes,the company will use an accelerated method as follows:

Assuming a tax rate of 40 percent,what is the relevant cash flow for present value analysis associated with the tax savings related to depreciation for Year 2?

A Firm Will Depreciate a Computer Costing $10,000 Over Five