What will be the amount of that pre-tax profit or loss

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Reference no: EM133394561

Case Study: Assume that the law allows an MLB franchise owner to assign 50% of a team's purchase price to player contracts, and that they must be depreciated over one year. Freddy Moneybucks purchases the Anaheim Angels for $300 million dollars. In the first year with Moneybucks as owner, the Angels bring in $100 million in revenue. Costs, exclusive of player contracts, are $90 million.

Questions: Given this information, in a 5-7 minutes presentation respond to the following:

If Moneybucks depreciates player contracts to the maximum extent allowable by law, will the Angels show a pre-tax profit or pre-tax loss in the first year?
What will be the amount of that pre-tax profit or loss?

Reference no: EM133394561

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