Question
Sticky Sam buys a piece of equipment for $61,400 that has a useful life of 4 years. The equipment will generate operating cash flows of
Sticky Sam buys a piece of equipment for $61,400 that has a useful life of 4 years. The equipment will generate operating cash flows of $18,550 per year and will have no salvage value at the end of its life. The income tax rate is 30%. Straight-line depreciation is used. How much is the depreciation tax shield?
A. $10,745
B. $15,350
C. $4,605
D.$5,565
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College Accounting A Practical Approach Chapters 1-26
Authors: Jeffrey Slater
8th Edition
0130911429, 978-0130911421
