Million worth of new equipment

Assignment Help Finance Basics
Reference no: EM132580024

Your firm is considering a project that would require purchasing $7.5 million worth of new equipment. Determine the present value of the depreciation tax shield associated with this equipment if the? firm's tax rate is 40%?, the appropriate cost of capital is 8%?, and the equipment can be? depreciated:

a.? Straight-line over a? ten-year period, with the first deduction starting in one year.

b.? Straight-line over a? five-year period, with the first deduction starting in one year.

c. Using MACRS depreciation with a? five-year recovery period and starting immediately.

d. Fully as an immediate deduction.

a.? Straight-line over a? ten-year period, with the first deduction starting in one year. The present value of the depreciation tax shield associated with this equipment is ?$ nothing million. (Round the final answer to three decimal places.? Round all intermediate values to four decimal places as? needed.)

Reference no: EM132580024

Questions Cloud

How much must pamela deposit in an account today : How much must Pamela deposit in an account today if interest is 5% compounded quarterly?
Explain whether Mr Wong breached his duty as a partner : Explain whether Mr Wong breached his duty as a partner of Wong, Lee & Chan and discuss the consequence of the breach, if any
System of equations by the gauss-jordan method : Solve the system of equations by the Gauss-Jordan method.
What was the standard deviation of returns : If the return on stock A in year 1 was 2 %, in year 2 was -7 %, in year 3 was 11 % and in year 4 was -8 %, what was the standard deviation
Million worth of new equipment : Your firm is considering a project that would require purchasing $7.5 million worth of new equipment.
Analyze the current situation of healthcare services : The student will prepare a written essay regarding the Healthcare Reform, its benefit and its negative aspects. Analyze the current situation of healthcare.
Discuss clash between traditional and corporate cultures : Discuss the clash between traditional (old school) and corporate cultures (new school) in the casino industry.
What is the general equation for future value : How is the compound process related to the payment of interest on savings? What is the general equation for future value?
What are the organisms most likely to cause an uti : Shelly is a 4-year-old preschooler who lives with her parents and younger brother. She and her brother attend a local daycare center during the week while.

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate the book value

Your boss comes to you to calculate the Book Value. You tell the boss the Book Value is ____.

  What is the operating cash flow

That is, the depreciation each year will be $128190/14. Assuming a tax rate of 26%, what is the operating cash flow?

  How long will it take to pay off the loan

An $85,000 business can be purchased by making a down payment of $15,000 and financing the balance with a short-term business loan at 3.00%

  Show the expected net income under each plan

Hildebrand proposes selling higher-margin merchandise, such as party dresses, in addition to the existing product line. An importer can supply a minimum.

  Stock price at which shawna would break even

The stock is presently priced at $29, and rises to $32 before the expiration date. What is the stock price at which Shawna would break even?

  What is the purpose of a rating agency?

What is the purpose of a Rating Agency?

  Dick marginal federal tax rate

A 6.7% McDonald's corporate bond that is taxable at both the state and federal levels. (Hint: Use the TETR.) If the Illinois state tax rate is 6% and Dick's marginal federal tax rate is 30%, which investment yields the highest after-tax return?

  Differences between futures and option contracts

Explain the differences between futures and option contracts. Which derivative can be assessed "less risk"?

  Find online the annual 10-k report for peets coffee and

find online the annual 10-k report for peets coffee and tea peet for 2008. answer the following questions from the

  What is the operating cash flow

That is, depreciation each year is $13,228/7. The tax rate is 36 percent. What is the operating cash flow?

  Cost of equity for purple corporation

Purple corporation has a beta of 2.0. The current T-bill rate is 5% and the stock market historical return has exceed the risk free rate by 8%.

  Exchange rates fluctuate under both the fixed exchange rate

exchange rates fluctuate under both the fixed exchange rate and floating exchange rate systems. what then is the

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