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Vanyuwa [196]
3 years ago
14

Salinas Corporation has net income of $15 million per year on net sales of $90 million per year. It currently has no long-term d

ebt but is considering a debt issue of $20 million. The interest rate on the debt would be 7%. Salinas Corp. currently faces an effective tax rate of 40%. What would be the annual interest tax shield to Salinas Corp. if it goes through with the debt issuance?
Mathematics
1 answer:
Alborosie3 years ago
8 0

Answer:

The annual interest tax shield to Salinas Corp would be of $560,000

Step-by-step explanation:

In order to calculate the annual interest tax shield to Salinas Corp if it goes through with the debt issuance we would have to calculate the following formula:

Annual Interest tax shield = Interest * tax

Interest = debt *rate of interest

Interest=$20 million * 0.07

Interest= $ 1.40 million

tax= 40%

Therefore, Annual Interest tax shield =$1.40 million * 0.40

Annual Interest tax shield = $560,000

The annual interest tax shield to Salinas Corp would be of $560,000

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▹ Answer

<em>x = -7</em>

▹ Step-by-Step Explanation

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When a six sided die is rolled then what is the probability that the number<br> rolled will be four?
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Step-by-step explanation:

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Answer:

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Part B)

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Step-by-step explanation:

We are given a cubical vessel that has side lengths of 10cm. The vessel is completely filled with water.

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This volume is poured into a rectangular vessel that has a length of 25cm, breadth of 20cm, and a height of 10cm.

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To find how how much more water is needed to completely fill the rectangular vessel, we can find the maximum volume of the rectangular vessel and then subtract the volume already in there (1000 cubic centimeters) from the maximum volume.

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Sincer 1000 cubic centimeters is 1 liter, this means that we will need four more liters of water in order to fill the rectangular vessel.

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