Calculate the present value of the depreciation tax shield

Reference no: EM13622316

Calculate the present value of the depreciation tax shield for an asset in the 3-year class life costing $100,000. Three-year class percentages are 33.33%, 44.45%, 14.81%, and 7.41%, respectively for years 1 through 4. The firm has a 35% tax rate and a 10% cost of capital. Compare this present value to that calculated for straight-line depreciation with no salvage value. Show your work and formulas.

Reference no: EM13622316

Questions Cloud

Ebenezer scrooge has invested 60 of his money in share a : ebenezer scrooge has invested 60 of his money in share a and the remainder 40 in share b. he assesses their prospects

The combined weights of passengers and their luggage in kg : the combined weights of passengers and their luggage in kg are uniformly distributed on the interval a b. the weights

Assuming that intakes at different meals arc independent of : suppose that for a certain individual calorie intake at breakfast is random variable with mean 500 and standard

Toombs media corp recently completed a 3-for-1 stock split : toombs media corp. recently completed a 3-for-1 stock split. prior to the split its stock sold for 80 per share. the

Calculate the present value of the depreciation tax shield : calculate the present value of the depreciation tax shield for an asset in the 3-year class life costing 100000.

A random variable x has mean mu and standard deviation : a random variable x has mean mu and standard deviation sigma. suppose n independent observations of x are taken and the

A worker uses a cart to move a load of bricks a distance of : a worker uses a cart to move a load of bricks a distance of 10 m across a parking lot. if he pushes the cart with a

The stern winch takes in the towing cable at the rate of 2 : the 580-ton tug is towing the 1200-ton coal barge at a steady speed of 6 knots. for a short period of time the stern

Which of the following best describes what the 95 : which of the following best describes what the 95 confidence means in a 95 confidence interval for mu of 10 20?a there

User Account

All Pages