Question
1. What is the present value at a 10 percent discount rate of the depreciation tax shield for a firm in the 35 percent tax
1. What is the present value at a 10 percent discount rate of the depreciation tax shield for a firm in the 35 percent tax bracket that purchases a $50,000 asset being depreciated at 10 percent declining balance with a half-year rule?
$12,430 | ||
$37,908 | ||
$10,023 | ||
$8352.3 |
2. A firm with 60 percent of sales going to variable costs, $1.5 million fixed costs, and $600,000 depreciation would show what accounting profit with sales of $3 million? Ignore taxes.
$700,000 loss | ||
$800,000 Loss | ||
$900,000 loss | ||
$600,000 loss |
3. Which of the following techniques may be more appropriate to analyze projects with interrelated variables?
Sensitivity analysis | ||
DOL analysis | ||
Break-even analysis | ||
Scenario analysis |
please show all solutions!!
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