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how much will the net income change as a result of the change in depreciation. (will need to calculate the interest expense) In 2019 Brandt-Leland
how much will the net income change as a result of the change in depreciation. (will need to calculate the interest expense)
In 2019 Brandt-Leland reported $8,500,000 of sales, $5,000,000 of operating costs other than depreciation, and $1,330,000 of depreciation. The company had no amortization charges, it had $5,000,000 of bonds outstanding that carry a 5% interest rate, and its federal-plus-state income tax rate was 25%. 2020 data is are expected to remain unchanged except for one item, depreciation, which is expected to increase by $107,000. By how much will the net income change as a result of the change in depreciation? Note: You will need to calculate the interest expense using information provided regarding the bonds. Assume the same amount of interest will (5 points) be paid during both years on the outstanding bonds Step by Step Solution
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