User Account

All Pages

Compute the present value of the depreciation tax benefit

Assignment Help Accounting Basics
Reference no: EM133156693

Question - Yankee Freight provides truck freight services throughout the northeast United States. The firm is considering an investment in improved logistics management requiring a mainframe computer and communications software, which would cost $1,000,000 and have an expected life for eight years. For tax purposes, the investment will be depreciated using the straight-line method, with no salvage value. The company's cost of capital and tax rate are 8 and 30 percent, respectively.

Required -

A. Compute the present value of the depreciation tax benefit.

B. Assume instead that Yankee Fright uses the double-declining-balance method of depreciation for tax purposes with a five-year life. Compute the present value of the depreciation tax benefit.

C. Why is the depreciation tax benefit computed in (B) larger than that computed in (A)?

Reference no: EM133156693

Questions Cloud

Stage of the basic planning process : Which stage of the basic planning process is the most important to you? Why?
When should the wacc and the apv be used : When should the WACC and the APV be used? How do personal taxes affect the use of these two methods? Use examples when explaining your answer
Ongoing preferential trading relationship with the eu : In the Brexit case, there are four options for the UK to consider with regards to an ongoing preferential trading relationship with the EU.
Firearms policy coalition concerns : The Firearms Policy Coalition, which takes no position on abortion, filed an amicus brief in the Texas case that was heard by the Supreme Court in late 2021, st
Compute the present value of the depreciation tax benefit : Yankee Freight provides truck freight services throughout the northeast United States. Compute the present value of the depreciation tax benefit
Recognizing a human face through technology : Facial recognition is a way of recognizing a human face through technology.
What the annual breakeven point in sales dollars : The sales and cost data for two companies in the transportation industry are as follows: What the annual breakeven point in sales dollars for X Company
Explain the digital supply chain strategy : Discuss how Jabile's intelligent, digital supply chain strategy may assure their competitive advantage over similar companies?
What is the amount of net sales : Direct labor cost incurred during the period amounted to 1.5 times the factory overhead. What is the amount of net sales

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd