Question
Assume that ABC has annual revenue=200; COGS =$160; SG&A(combined)=50; Book value of PP&E=300; PP&Es useful life=10 IRS allows only a strait line depreciation. Tax rate
Assume that ABC has annual revenue=200;
COGS =$160;
SG&A(combined)=50;
Book value of PP&E=300;
PP&Es useful life=10
IRS allows only a strait line depreciation. Tax rate 20 %.
Q.2.1 What is the Net Income and Tax Bill of ABC?
Q.2.2 . Now assume that ABC is able to reclassify $100 of COGS as CapEx. What is the Net Income and Tax Bill of ABC?
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The International Handbook Of Public Financial Management
Authors: Richard Allen, Richard Hemming, B. Potter
1st Edition
1137574895, 978-1137574893
