Question
Let's assume Company A spends $60,000 in Year 0 on equipment upgrades.Company A can either (1) deduct the expense entirely in Year 1 or (2)
Let's assume Company A spends $60,000 in Year 0 on equipment upgrades.Company A can either (1) deduct the expense entirely in Year 1 or (2) spread it out inEVEN amounts of 6 years. What is the PV of the difference of these methods. Assume a 30% tax rate for Company A and a Cost of Capital of 9%.
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Fundamentals Of Financial Management
Authors: James Van Horne, John Wachowicz
13th Revised Edition
978-0273713630, 273713639
