Answer:
nominal tax shield in year 10: 6,812 dollars
present value of the tax shield: 1,837.49
Explanation:
the nominal tax shield in year 10:
We look into the MACRS table for 10-years property class: 6.55%
The depreciation expense for this year is 260,000 x 6.55% = 17,030
Then this produces a tax shield of 40% 6,812
The nominal tax shield at year 10 is 6,812 dollars
considering time value of money today this tax shield is worth:
PV: 1,837.49
Answer:
$113.86 billion
Explanation:
Real GDP = nominal GDP/ price index
Real GDP = $14460 billion / 127 = $113.86 billion
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The purchase of land by Hanover, Inc. through the issuance of long term bonds should be reported on the statement of cash flows as
significant non cash investing and financing activity that merits disclosure.