Question
Bevan Co. is considering investing in an equipment to implement a cost-cutting proposal. The pre-tax cost reduction is expected to equal $5,000 for each of
Bevan Co. is considering investing in an equipment to implement a cost-cutting proposal. The pre-tax cost reduction is expected to equal $5,000 for each of the four years of the project's life. The equipment has an initial cost of $18,500 and belongs in a 20% CCA class. Bevan Co. has a tax rate of 30%. What is the value of the depreciation tax shield for year 3 of the project?
- $555
- $679
- $799
- $863
- $999
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International Financial Management
Authors: Cheol S. Eun, Bruce G.Resnick
6th Edition
71316973, 978-0071316972, 78034655, 978-0078034657
