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How much higher would gamesa pretax income be

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Reference no: EM132685184

Suppose that Gamesa spends 50 on capitalized development costs in a given year, that development costs have a 5 year depreciable life (no salvage), that Gamesa takes a full year of depreciation in the first year, that the year in question is the first that Gamesa has capitalized development costs and that there are no taxes.

Problem a. How much higher would Gamesa's pretax income be relative to a firm that reported under US accounting principles?

Problem b. How much higher would total assets be?

Reference no: EM132685184

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