all else equal, how does a decrease in a depreciation schedule ( a 6-year schedule to a 4-year schedule) affect NPV when a tax rate of 30%?
a. not enough info.
b. no NPV impact
c. Increases NPV
d. Decrease in NPV
please find below the solution let me know if you need any clarification.
rate positively
correct answer is option : Increases NPV .
Exp: NPV will increase if the depreciation schedule reduced from 6 to 4 because now more tax yield on depreciation will be available at early stage and will improve the NPV.
all else equal, how does a decrease in a depreciation schedule ( a 6-year schedule to...
1.-How does an increase in depreciation expense affect FCF(free cash flow) when a tax rate is 30%? Increases FCF Decreases FCF No impact on FCF 2.- All else equal, How does a depreciation schedule (eg. a 6-year schedule to a 4-year schedule) affect NPV when a tax rate is 30%? Increases NPV Decreases NPV No impact on NPV Not enough info.
All else equal, how would an increase in the tax rate affect the government purchases multiplier? A. It increases the multiplier only if the marginal propensity to consume if the MPC is greater than the tax rate. B. It has no effect. C. It increases the multiplier only if the marginal propensity to consume (MPC) is less than the tax rate. D. It increases the government purchases multiplier. E. It decreases the government purchases multiplier.
Answer the following questions. 1. All else equal, a currency depreciation in the home nation would cause what response? A) Consumers in the home nation would find it more expensive to buy domestic goods compared to foreign goods, and the trade balance would decrease. B) Consumers in the home nation would cut back on both domestic and foreign goods and the trade balance would decrease. C) Consumers in the home nation would increase spending on both domestic and foreign goods,...
All else held constant, which one of these is most apt to decrease the average cost of capital (WACC) of a leveraged firm? a) An increase in a market's average return b) A decrease in the tax rate c) An increase in the treasure rate when the firm's equity beta > 1 d) An increase in the firm's risk and equity beta
Why is all incorrect
Which of the following statements is most correct? a. All else equal, if a bond's expected yield to maturity decreases, its price will fall. b. All else equal, if a bond's yield to maturity increases, its current yield will fall. c. If a bond's yield to maturity exceeds the coupon rate, the bond will sell at a premium over 4. par d. All of the statements above are correct e) None of the statements above is...
Assume a project has conventional cash flows. All else equal, which of the following statements is CORRECT? a. The project's MIRR is unaffected by changes in the WACC. b. The project's NPV increases as the WACC declines. c. The project's IRR increases as the WACC declines. d. The project's discounted payback increases as the WACC declines. e. The project's regular payback increases as the WACC declines.
A machine cost $80,000. Depreciation is calculated straight line equal amounts over 4 years. Every year the machine increases cash flows by an amount of $30,000. Taxes, Opportunity Cost have all been accounted for in this number. There is not net working capital. After 3 years when the machine has only been depreciated for 3 years and therefore the book value is not zero, the machine is sold for $30,000. This, therefore is a 3 year project. The rate of...
All else equal, how does the price of a putable bond compare to the price of the underlying straight bond? Group of answer choices Putable = straight Putable < straight Putable > straight
4. Which of the following statements is true, holding all else equal? I. If inflation increases and investors' real rate of return stays the same, bond prices tend to decrease II. If investors' real rate of return decreases and inflation stays the same, bond prices tend to increase III. If the yield to maturity on a bond increases, the bond's coupon rate will increase I onl II only 1 and 11 only II and III only C. e. I, II,...
if there are 2 million newborn babies increasing within this economy suddenly, assume nothing else changes, how is this going to affect the labor force participation rate? a. increase b. remain the same c. decrease d. not enough information