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jolli1 [7]
3 years ago
5

If the depreciable investment is $1,000,000 and the MACRS 5-Year class schedule is: Year-1: 20%; Year-2: 32%; Year-3: 19.2%; Yea

r-4: 11.5%; Year-5: 11.5% and Year-6: 5.8% Calculate the depreciation tax shield for Year-2 using a tax rate of 30%:
Business
1 answer:
alexdok [17]3 years ago
5 0

Answer: C.$96,000

Explanation:

The Depreciation Tax Shield refers to how much in taxes are being saved by the company for depreciating an asset because Depreciation is tax deductible.

Depreciation Tax Shield = Tax Rate * Depreciation Amount for year

= 30% * ( 1,000,000 * 32%)

= 30% * 320,000

= $96,000

By claiming a Depreciation of $320,000 in Year 2, the depreciable asset saved the company $96,000 in taxes.

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In the obsolescing bargain situation, bargaining power of the host country government will be stronger when the MNC has made lar
patriot [66]

Answer:

True

Explanation:

The obsolescing bargain is a model of interaction between a multinational enterprise and a host country government, which initially reach a bargain that favors the MNE but where, over time as the MNE's fixed assets in the country increase, the bargaining power shifts to the government

4 0
3 years ago
Demand for a certain product is forecast to be 800 units per month, averaged over all 12 months of the year. The product follows
laiz [17]

Answer:

Demand in January will be 640 units

So option (C) will be the correct option

Explanation:

We have given average demand for a particular product is 800 units

And seasonal index = 0.8

We have to find the demand in a particular session , that is in January

We know that seasonal index is given by

Seasonal\ index=\frac{demand\ in\ a\ particular\ season}{average\ demand}

So 0.8=\frac{demand\ in\ January}{800}

So demand in January = 640

So option (c) will be the correct option

8 0
3 years ago
The main challenge of career planning in changing times is that
Serggg [28]
The answer is to adjust plans very often
4 0
3 years ago
Horseshoe Stables is losing significant market share and thus its managers have decided to decrease the firm's annual dividend.
Naya [18.7K]

Answer:

$3.90

Explanation:

using the discount model we can calculate the stock price:

stock price = [dividend x (1 - g)] / (RRR + g) ⇒ since the growth rate is negative, we need to change additions for subtractions and vice versa.

stock price = [$0.86 x (1 - 3.5%)] / (17.8% + 3.5%) = ($0.86 x 0.965) / 0.213 = $0.8299 / 0.213 = $3.90

4 0
3 years ago
The Horizon Company will invest $60,000 in a temporary project that will generate the following cash inflows for the next three
Sholpan [36]

Answer:

$ -3,163.04

No

Explanation:

The net present value is the present value of after tax cash flows from an investment to the amount invested.

The NPV can be found using a financial calculator:

Cash flow in year 0 = -$60,000

Cash flow in year 1- $ 15,000

Cash flow in year 2- $25,000

Cash flow in year  3- $40,000 - $10,000 = $30,000

I = 10%

NPV = $-3,163.04

The project should not be embarked upon because the cost of the project is greater than the present value of the after tax cash flows. The NPV is negative.

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

3 0
2 years ago
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