What are the annual cca tax shields

Assignment Help Finance Basics
Reference no: EM132807259

Spherical Manufacturing recently spent $20 million to purchase some equipment used in the manufacture of disk drives. This equipment has a CCA rate of 25% and? Spherical's marginal corporate tax rate is 39%.

a. What are the annual CCA deductions associated with this equipment for the first five? years?

b. What are the annual CCA tax shields for the first five? years?

c. What is the present value of the first five CCA tax shields if the appropriate discount rate is 12% per? year?

d. What is the present value of all the CCA tax shields assuming the equiment is never sold and the appropriate discount rate is 12% per? year?

e. How might your answer to part? (d) change if Spherical anticipates that its marginal corporate tax rate will increase substantially over the next five? years?

Reference no: EM132807259

Questions Cloud

What hope deductible casualty loss is : Both losses involved personal-use property. Hope's AGI for the year is $35,000 and she does not have insurance coverage. Hope's deductible casualty loss is
Find the maturity on a comparable : A bond that matures in 9 years has $1000 par value. The annual coupon interest rate is 14 percent and the market's required yield
What is nancy agi as a result of the transactions : During the year, Nancy sells activity C and realizes a $15,000 taxable gain. What is Nancy's AGI as a result of these transactions?
Compute the amount of losses due to activities b and c : Compute the amount of losses due to Activities B and C that are deductible in 2020 and any suspended losses carried forward to 2021.
What are the annual cca tax shields : Spherical Manufacturing recently spent $20 million to purchase some equipment used in the manufacture of disk drives. This equipment has a CCA rate of 25% and?
What is total cost to be accounted for : What is total cost to be accounted for? ABC, Inc. uses a process costing system to accumulate costs related to silk scarf production.
Have any of the given assumptions been dispelled : Through your readings this week, you learned about basic developmental characteristics and how each can serve as a window through which to contemplate.
What is macaulay duration : What is Macaulay's duration? How is it useful for a bond portfolio?
What is the total return to an investor : a. An 8%, five-year bond yields 6%. If this yield to maturity remains unchanged, what will be its price one year hence? Assume annual coupon payments and a face

Reviews

Write a Review

Finance Basics Questions & Answers

  What are the currencies that the mnc uses

a. What are the currencies that the MNC uses to conduct its international business?

  Valuation case - andrew hawks founder of a caribbean based

valuation case - andrew hawks founder of a caribbean based start-up firm nabr publishing ltd. just completed

  Annual fixed operating and marketing costs

Shannon's variable costs of production, packaging, and distribution are $3.60 per six pack. Shannon's has the following annual fixed operating and marketing

  Major changes in the market for physicians services

1) What are some of the major changes in the market for physicians' services that are affecting both physician incomes and their practices? 2) How have physician incomes by specialty changed as a result of managed care?

  Lowest-cost strategy

Using The Fortune 500 List, identify one company that uses Lowest-Cost Strategy and one company that uses Differentiation Strategy.

  Assess the relative efficiency

In a short paragraph (100 words), explain to your statistics professor why Treep was using the wrong probability to assess the relative efficiency.

  Explain what it means for a firm to have a current ratio

explain what it means for a firm to have a current ratio equal to 0.50. would the firm be better off if the current

  Determine the price of the synthetic stock

Given that exercise price is $75, call option premium is $3.5, put option premium is $ 1, both options have a time to maturity of 32 days.

  Calculate the realized rate of return earned on this bond

You bought a bond five years ago for $935 per bond. The bond is now selling for $980. It also paid $75 in interest per year, which you reinvested in the bond. Calculate the realized rate of return earned on this bond.

  Locate two recent articles on accounting for multinational

locate two recent articles on accounting for multinational operations. you can use one that focuses on ifrs

  Compute the npv of the project in eur

Your firm is based in Germany and is considering an investment opportunity in the United States.

  Find the maturity risk premium for the security

Assume that a 3-year Treasury security yields 3.70%. Also assume that the real risk-free rate (r*) is 0.75%, and inflation is expected to be 2.25% annually.

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