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QveST [7]
4 years ago
10

A project will reduce costs by $62,750 but increase depreciation by $14,812. what is the operating cash flow of this project bas

ed on the tax shield approach if the tax rate is 34 percent?
Business
1 answer:
andreev551 [17]4 years ago
5 0
Reduced cost = $62,750
increased depreciation = $14,812
tax rate = 34% = 34/100 = 0.34
operating cash flow of this project = ?
operating cash flow = (reduced project cost x (1-tax rate)) + (increased amount of depreciation x tax rate)
= ($62,750 x (1-0.34)) + ($14,812 x 0.34)
= $41,415 + $5036.08
= $46,451.08
so, operating cash flow for this project is $46,451 approx.
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Think of the simple quantity theory of money in the AD-AS framework. In that framework, the AS curve is a.horizontal. b.upward-s
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In the simple quantity theory of money in the AD-AS framework, the AS curve kinked at natural real.

<h3>What is AS curve or Aggregate Supply Curve?</h3>
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2 years ago
Biochemical Corp. requires $690,000 in financing over the next three years. The firm can borrow the funds for three years at 9.2
viva [34]

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a. We have:

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Interest cost of short-term variable-rate = $192,51

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a. Determine the total interest cost under each plan.

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Interest cost of short-term variable-rate = (Amount required to be borrowed * First year interest rate) + (Amount required to be borrowed * Second year interest rate) + (Amount required to be borrowed * Third year interest rate) = ($690,000 * 7.50%) + ($690,000 * 12.15%) + (($690,000 * 8.25%) = $192,510

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Since the $191,475 interest cost of long-term fixed-rate is less than $192,510 interest cost of short-term variable-rate, this implies that long-term fixed rate plan is less costly.

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3 years ago
Ted's Co. offers a zero coupon bond with an 11.3% yield to maturity. The bond matures in 16 years. What is the current price of
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