The increase in the value of the company after the loan

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Reference no: EM131894101

1. Use SL depreciation to determine annual depreciation charges and annual book values for an asset having the price of $1500000, depreciable life of 10 years, and the salvage value of $300000. (Can you please list any equations you use and what you used them for)

2. The Dart Company is financed entirely with equity. The company is considering a loan of $2.6 million. The loan will be repaid in equal installments over the next two years, and it has an interest rate of 8 percent. The company’s tax rate is 35 percent. According to MM Proposition I with taxes, what would be the increase in the value of the company after the loan?

Reference no: EM131894101

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