4. A certain piece of equipment costs $32 million plus an additional $2 million to install. This equipment qualifies under the 5-year MACRS category. For a firm that discounts cash flows at 12 percent and faces a tax rate of 34 percent, what is the present value of the depreciation tax savings associated with this equipment? By how much would that number change if the firm could treat the $2 million installation cost as a deductible expense rather than include it as part of the depreciable cost of the asset?
Recently Asked Questions
- Consider the objective function z=3x+5y subject to the following constraints: x+y≥5 5x+6y≤60 6x+5y≤60 x≥0 y≥0 Find the feasible region and list the
- Part 1: what other instrumentation system in the field of geoscience requires a minimum of three instrument stations (although not a bird or satellite) to
- To what extent can two satellites (2 birds) constrain the location of a person holding a receiver? Explain.