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A small Harley dealership was expected to have taxable income of $150,000 this year, at a tax rate of 40%. However, the company just bought
A small Harley dealership was expected to have taxable income of $150,000 this year, at a tax rate of 40%. However, the company just bought a new virtual-reality display that they anticipate will boost motorcycle sales revenue by $10,000. The display has a first cost of $40,000, and will be depreciated using straight-line depreciation over a five-year period. By how much should the company expect its income-tax liability to increase or decrease because of buying the display?
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