Question
Your firm is evaluating a project that will run for the next five years, using straight-line depreciation (MACRS not allowed for this one). You have
Your firm is evaluating a project that will run for the next five years, using straight-line depreciation (MACRS not allowed for this one). You have been provided with an estimate of $260,000 in annual changes to EBITDA and an $80,000 annual increase in taxes that would occur if this project were undertaken. Your firm's tax rate is 40%. Your best estimate of the net change to annual depreciation and amortization expense that would occur if you execute the project is...
$88,000 | ||
$80,000 | ||
$60,000 | ||
$40,000 | ||
$32,000 | ||
$24,000 | ||
None of the above (or the answer cannot be determined with the information provided) |
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