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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

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<h3>How much mining is done in Central Africa?</h3>

Central African nations such as Central African Republic are well known to have a lot of natural resources.

Minerals available include copper, diamonds, limestone, uranium and others. As a result, mining these minerals brings foreign exchange to the region.

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2 years ago
The weather station model performs the invaluable function of ____________.
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Answer:

Option B                                    

Explanation:

In simple words, Models of weather stations are visual representations displaying the weather taking place at a specified monitoring station. The stations design was developed by meteorologists that incorporate a variety of climate components into some kind of small area on satellite images.This model has been of high use to prepare for the natural calamtites in advance but it does not influence the project in any way.

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3 years ago
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In this problem, I believe what we are asked to do is to identify the type of variable the 2nd variable is. We are given that the 2nd variable is “7 jumps”.  This means that the 2nd variable is quantitative because it refers to or relating to a measurement of something rather than the quality. We also know that jumps can only take whole numbers, not decimal. Therefore it is also discrete. Hence, the 2nd variable is:

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6 0
3 years ago
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For more help under this topic, you should visit this link:

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<u>(just copy and paste it into link bar)</u>

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