1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Kaylis [27]
3 years ago
8

Sway's Market is considering a project that will require the purchase of $1.4 million in new equipment. The equipment will be de

preciated straight-line to zero over the 5-year life of the project. The firm expects to sell the equipment at the end of the project for 20 percent of its original cost. New net working capital equal to 10 percent of sales will be required to support the project. All of the new net working capital will be recouped at the end of the project. Annual sales are estimated at $750,000 with costs of $338,000. The required rate of return is 12 percent and the tax rate is 34 percent.What is the value of the depreciation tax shield in Year 2 of the project?
Business
1 answer:
hodyreva [135]3 years ago
7 0

Answer:

tax shield year 2 95,200

Explanation:

The tax shield will be the depreciation expense times tax rate

<u>Our first step is to calculate the depreciation expense:</u>

The equipment is worth 1.4 million and has a 5-years useful life

It is being depreciate on straight-line

depreciation per year

equipment / useful life

1.4 million / 5 = 0.28 = 280,000

<u>Now we apply the tax rate of 34%</u>

280,000 x 34% = 95,200

This will be the tax shield on Year 2

You might be interested in
Each of the following would increase the demand for U.S. dollars, shifting the demand curve for dollars to theright, except:
earnstyle [38]

Answer:

<h2>The answer to the given question would be option C. or an increase in the real interest rate on U.S. assets.</h2>

Explanation:

  • An increase in the real interest rate on US financial assets basically imply a higher financial cost of borrowings of these assets which would consequently reduce the demand for US assets among foreign investors or borrowers.
  • As the real interest rate on US assets goes up,the foreign investor have to pay more as interest on any borrowing of the US assets in US dollars.Therefore,the periodic interest payments in terms of US dollars also increases for the foreign or international financial investors which will eventually reduce the demand for US dollars in the foreign exchange market for US dollars.
  • As a result of such occurrence,the demand curve for US dollars would shift leftward or downward thereby reducing the currency value of US dollars relative to other foreign or international currencies.
6 0
3 years ago
Net income or net loss for a period is calculated by the following formula
V125BC [204]
<span>Revenues–Expenses–Current Debt = Net Profit or Net Loss

</span>
3 0
3 years ago
Read 2 more answers
Starting the next task before the first task is complete is _____ Group of answer choices slack lead negative lead float lag
Charra [1.4K]

Starting the next task before the first task is complete is lead.

In the eyes of some businesses, a "lead" is a contact that has already been identified as a potential client, whereas for other businesses, a "lead" is any sales contact. However, a lead's potential to become a future client is the same regardless of how it is defined.

A lead is, to put it simply, a person or group who is interested in what you are selling. Contact details are shared, such as an email address, a phone number, or even a social network account, to demonstrate the interest.

Learn more about Lead here brainly.com/question/5687830

#SPJ4

6 0
2 years ago
Click on the link below(I will add it below) to access a video on Entrepreneur Mark Zuckerberg. As you watch the video, fill in
Virty [35]

Answer:

This is what shows

Explanation:

4 0
3 years ago
"Quill Industries uses the aging of accounts receivable method. Its estimate of uncollectible receivables resulting from the agi
vlabodo [156]

Answer:

$23,300

Explanation:

Bad debt Expense will be calculated using the account receivable method. The expense is calculated using the account receivable aging analysis.

Closing Value of the Allowance for Doubtful Accounts will be as follow

As Allowance for Doubtful Accounts already have Credit balance of $12,200, we need to adjust the remainder to make the closing credit balance of Allowance for Doubtful Accounts $35,500 at the year end.

Adjustment Value = $35,500 + $12,200 = $23,300

This Expense will be recorded as follow

Dr.   Bad Debt Expense                         $23,300

Cr.   Allowance for Doubtful Accounts $23,300

3 0
3 years ago
Other questions:
  • Anna and ben are up for the same promotion at work. when it comes time to make a decision, the management committee chooses ben
    7·2 answers
  • A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2021. Accounting records on that date indicated the following:
    13·1 answer
  • Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable expenses are 65% of sales and fixed e
    5·1 answer
  • Fiona, a regional sales manager, works from her office in State U. Her region includes several states, as indicated in the sales
    5·1 answer
  • On a public ballot, a state legislature places a question relating to legalization of marijuana for medicinal use. In addition,
    9·2 answers
  • An increase in demand and a decrease in supply, will lead to a(n) ________ in equilibrium quantity and a(n) ________ in equilibr
    6·1 answer
  • Read the following descriptions and identify the type of risk or term being described:
    9·1 answer
  • Please help!! Question: Drake begins wearing knee high socks in his videos and concerts? What
    7·1 answer
  • One of the reasons service failures need to be addressed quickly is to: increase empowerment zones. avoid a situational ethics c
    14·1 answer
  • Differentiate between electricity geyser and gas geyser​
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!