Estimate the present value of tax benefits from depreciation

Assignment Help Financial Management
Reference no: EM132028886

Your Company is considering a new project that will require $790,000 of new equipment at the start of the project. The equipment will have a depreciable life of 5 years and will be depreciated to a book value of $255,000 using straight-line depreciation. The cost of capital is 12%, and the firm's tax rate is 39%. Estimate the present value of the tax benefits from depreciation.

Reference no: EM132028886

Questions Cloud

Accounting practices can lead to comparability problems : Differences in accounting practices can lead to comparability problems in all of the following cases except ________________.
Which type of annuity-ordinary or annuity due is preferable : Which type of annuity -ordinary or annuity due- is preferable as an investment?
Equivalent simple interest loan rate for this transaction : The loan requires quarterly payments. What is the equivalent simple interest loan rate for this transaction?
How many dollars of interest will they end up paying on loan : How many dollars of interest will they end up paying on this loan? Show your answer as a positive number to the nearest dollar.
Estimate the present value of tax benefits from depreciation : The cost of capital is 12%, and the firm's tax rate is 39%. Estimate the present value of the tax benefits from depreciation.
What will be the firm cash cycle : Assuming that all of Ken-Z’s sales are on credit, what will be the firm’s cash cycle?
Present value of the tax benefits from depreciation : The cost of capital is 11%, and the firm's tax rate is 30%. Estimate the present value of the tax benefits from depreciation.
Base your decision on present values : Which option will you choose if you base your decision on present values?
Trading cost per sale or purchase of marketable securities : The trading cost per sale or purchase of marketable securities to be $300 per transaction. What will be its optimal cash return point?

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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!

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