Question
Assume your firm is very profitable and pays a tax rate of 30%.You recently purchased a machine for $1 million, and can choose to depreciate
Assume your firm is very profitable and pays a tax rate of 30%.You recently purchased a machine for $1 million, and can choose to depreciate it straight-line over 10 years or straight-line over 5 years.Which results in a higher present value of your free cash flows?
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
