Answer:
$8.30 million approx
Explanation:
The computation of the present value of the interest tax shield is shown below:
Year 0 1 2 3 4
Outstanding debt $100 million $75 million $50 million $25 million $0
Less: Interest $10 million $7.5 million $5 million $2.5 million
Less: Tax shield at 40% $4 million $3 million $2 million $1 million of interest
Discount factor at 10% 0.90909 0.82645 0.75131 0.68301
Present value $3.63 million $2.48 million $1.50 million $0.683 million
So, the present value is $8.30 million approx
The discount factor should be computed below
= 1 ÷ (1 + rate) ^ years
Answer:
how can I select one of there isn't any options.
Answer:
$38,100
Explanation:
For avoidable cost, they are example of relevant cost. When a decision is taken , some costs are incurred in connection with such decision, they are known as avoidable cost.
The direct costs associated with a decision to produce are avoidable costs, which entails that such costs will not be incurred should Tangier company decides not to produce.
Therefore, the avoidable cost of Tangier is
= Raw materials cost + Direct labor cost
= $29,500 + $8,600
= $38,100
it would be a as a team I hope this helps
