What is the depreciation tax shield for this project in year

Assignment Help Financial Management
Reference no: EM131524243

Your firm purchases a business copier that costs $14,000 and requires $3,000 in maintenance for each year of its four-year life. After four years, the copier will be replaced. The copier falls into the MACRS three-year class life category. Use Table 12.8 on page 415 in your textbook for DDB depreciation. Assuming a tax rate of 32 percent, what's the depreciation tax shield for this project in year 4?

A. $421.45

B. $541.24

C. $331.97

D. $521.54

Reference no: EM131524243

Questions Cloud

What option strategies can be used to lock in exchange rate : What option strategies can be used to lock in an exchange rate between $0.7 USD/CAD and $0.8 USD/CAD?
Compare the normal distribution to empirical distribution : The normal distribution is often used with measurement variables such as height and weight. Compare the normal distribution to the empirical distribution.
Describe how you would implement the recommendations : Describe how you would implement the recommendations developed in the case study. Propose changes to the supplier contract in order for the supply chain.
Do you agree that consumerism is a religion in our society : Do you agree that consumerism is a religion in our society? Do you think it is dangerous if it is a sort of religion? Please explain your responses.
What is the depreciation tax shield for this project in year : Assuming a tax rate of 32 percent, what's the depreciation tax shield for this project in year 4?
How hotels perform in terms of sustainable tourism concepts : Compare and contrast how two hotels perform in terms of sustainable tourism concepts. Do the people of the blue mountains really care?
Create value for consumers and investors : create value for consumers, investors, and other stakeholders, such as the community in which the firm operates within its value chain.
Considering new three-year expansion project : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.47 million.
Example of possible decision supported by hiring system : In the Information Systems course module (included in the Week 4 Learning Resources), you were introduced to the information requirements.

Reviews

Write a Review

Financial Management Questions & Answers

  Initial fixed asset investment and zero salvage value

Consider a four-year project with the following information: initial fixed asset investment = $500,000; straight-line depreciation to zero over the four-year life; zero salvage value; price = $35; variable costs = $26; fixed costs = $200,000; quantit..

  Using decision-tree analysis-projects net present value

The Karns Company is deciding whether to drill for oil on a tract of land the company owns. The company estimates the project would cost $8 million today. If the company chooses to drill today, what is the project’s net present value? b. Using decisi..

  How much will you pay for company stock today

Caan Corporation will pay a $3.26 per share dividend next year. The company pledges to increase its dividend by 6.5 percent per year indefinitely. If you require a return of 15 percent on your investment, how much will you pay for the company’s stock..

  Financial statements of the green hills water district

The Green Hills Water District was established on January 1 to provide water service to a suburban development. It accounts for its operations in a single enterprise fund. Describe briefly how the financial statements of the Green Hills Water Distric..

  Value bel vino and starshine using market multiples

What are some key financial differences between the three companies in the simulations? What primary advantages does your company bring to the table in a potential merger or acquisition? What sources of synergy are possible in your two potential tran..

  What causes the big change in the returns on the annuities

Which investment offers the highest return?- Which offers the highest return if the payouts are doubled?- What causes the big change in the returns on the annuities?

  How much will each annual premium be

If Sandra changes her mind toward having the premium paid in only six annual payments, how much will each annual premium be?

  What is the firms market value capital structure

Organic Produce Corporation has 9.3 million shares of common stock outstanding, 680,000 shares of 7.3 percent preferred stock outstanding, and 193,000 of 8.5 percent semiannual bonds outstanding, par value $1,000 each. What is the firm's market value..

  Compute the break-even point in units

The Hartnett Corporation manufactures baseball bats with Pudge Rodriguez’s autograph stamped on them. Each bat sells for $35 and has a variable cost of $22. There are $97,500 in fixed costs involved in the production process. a. Compute the break-eve..

  Show the change from the current annual cost

The Winterville homeless shelters, including the potential new facility, are located in the same neighborhood as a facility that provides evening meals at no cost for needy individuals all week, year-round. In Worksheet 8.1, examine the effect if the..

  Determine the value of the bond

National Steel 15-year, $1000 par value bonds pay 5.5 percent interest annually. The market price of the bonds is &1,085, and your required rate of return is 7 percent. a. Compute the bonds expected rate of return. b. Determine the value of the bond ..

  Rates of return on large-company stocks and treasury bills

Over the past 4 years, large-company stocks and U.S. Treasury bills have produced the returns stated below. Given this information, What are the average rates of return on large-company stocks and Treasury bills? What are the standard deviation for l..

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