A firm buys a piece of equipment for $169,485.00 and will straight-line depreciate it to zero...
A firm buys a piece of equipment for $169,485.00 and will straight-line depreciate it to zero over five years. If the tax rate is 39.00%, what is the present value of the depreciation tax shield if the cost of capital is 11.00%?
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A firm buys a piece of equipment for $169,485.00 and will
straight-line depreciate it to zero...
A firm buys a piece of equipment for $183,910.00 and will straight-line depreciate it to zero...
A firm buys a piece of equipment for $183,910.00 and will straight-line depreciate it to zero over five years. If the tax # 3 rate is 39.00%, what is the present value of the depreciation tax shield if the cost of capital is 10.00 %? unanswered not submitted Submit Answer format: Currency: Round to: 2 decimal places
Keira Knightley Company buys a piece of equipment for $36,442 that will last for 7 years....
Keira Knightley Company buys a piece of equipment for $36,442 that will last for 7 years. The equipment will generate cash flows of $7,000 per year and will have no salvage value at the end of its life. Ignore taxes unless told to include them. Using straight-line depreciation over the life of the asset, what is the after tax cash flow in year 3? Assume a 30% tax rate and that the original cash flow was before tax.
Suppose a corporation is allowed to depreciate a $10,000 asset over 4 years using, straight-line depreciation. Assume th...
Suppose a corporation is allowed to depreciate a $10,000 asset over 4 years using, straight-line depreciation. Assume that the discount rate is 10%. Suppose that the corporation pays a 35% tax on its profits every year. What is the present discounted value of the tax deduction from the depreciation— that is, what is the value today of the tax savings over the 4 years due to the depreciation allowance?
C and D please Your firm is considering a project that would require purchasing $7.6 million...
C and D please
Your firm is considering a project that would require purchasing $7.6 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 37%, the appropriate cost of capital is 10%, 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...
Your firm is considering the purchase of a new piece of equipment for $20,000. The equipment...
Your firm is considering the purchase of a new piece of equipment for $20,000. The equipment will be straight line depreciated over four years. The salvage value (final book value) is 10 percent of the purchase price.The equipment will increase the earnings before interest, tax and depreciation by $8000 for each of the four years the equipment is used. The tax rate is 21 percent and the required rate of return is 10 percent. Should the equipment be purchased? No....
12) asset investment of $1.0 million. The fixed asset will be depreciated straight-line to zero over...
12) asset investment of $1.0 million. The fixed asset will be depreciated straight-line to zero over its four-year tax life, after which time it will have a zero market value. The project is estimated to generate S1500,000 in annual sales, with costs of $1,200,000. The tax rate is 40 percent and the required return for the project is 10 percent. What is the net present value? StarShine is considering a new four-year expansion project that requires an initial fixed A)...
How to calculate Present Value Tax Shield 60 answer 2. Your firm is considering a project...
How
to calculate Present Value Tax Shield
60 answer 2. Your firm is considering a project that would require purchasing $7.2 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 31%, the appropriate cost of capital is 9%, and the equipment can be depreciated a. Straight-line over a 10-year period, with the first deduction starting in one year. b. Straight-line over a five-year period, with...
Southport Company is considering the purchase of a piece of equipment that costs $100,000. The equipment...
Southport Company is considering the purchase of a piece of equipment that costs $100,000. The equipment would be depreciated on a straight-line basis to its expected salvage value of $10,000 over its 10-year useful life. Assuming a tax rate of 40%, what is the annual amount of the depreciation tax shield provided by this investment? Multiple Choice $4,000 $9,000 $3,600 None of these answers is correct.
Backhaul Machine movers depreciate their equipment over a 5-year-period using the straight-line depreciation method. On January...
Backhaul Machine movers depreciate their equipment over a 5-year-period using the straight-line depreciation method. On January 1, 2014, the equipment was purchased for $120,000. Its residual value is zero. What will be the net book value of the equipment by the end of December 2016? Select one: a. $72,000 b. $96,000 c. Not enough information is provided to calculate a value d. $48,000
Calculate the NPV for the following capital budgeting proposal: $100,000 initial cost for equipment, straight-line depreciation...
Calculate the NPV for the following capital budgeting proposal: $100,000 initial cost for equipment, straight-line depreciation over 5 years to a zero book value, $5,000 pre-tax salvage value of equipment, 35% tax rate, $45,000 additional annual revenues, $15,000 additional annual cash expenses, $8,000 initial investment in working capital to be recouped at project end, and a cost of capital of 11%. Should the project be accepted or rejected?
A firm buys a piece of equipment for $183,910.00 and will straight-line depreciate it to zero over five years. If the tax # 3 rate is 39.00%, what is the present value of the depreciation tax shield if the cost of capital is 10.00 %? unanswered not submitted Submit Answer format: Currency: Round to: 2 decimal places
C and D please
Your firm is considering a project that would require purchasing $7.6 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 37%, the appropriate cost of capital is 10%, 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...
12) asset investment of $1.0 million. The fixed asset will be depreciated straight-line to zero over its four-year tax life, after which time it will have a zero market value. The project is estimated to generate S1500,000 in annual sales, with costs of $1,200,000. The tax rate is 40 percent and the required return for the project is 10 percent. What is the net present value? StarShine is considering a new four-year expansion project that requires an initial fixed A)...
How
to calculate Present Value Tax Shield
60 answer 2. Your firm is considering a project that would require purchasing $7.2 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 31%, the appropriate cost of capital is 9%, and the equipment can be depreciated a. Straight-line over a 10-year period, with the first deduction starting in one year. b. Straight-line over a five-year period, with...
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