Answer:
Tax shield on depreciation = 600
Explanation:
given data
new piece of equipment = $11,000
salvage value = $1,000
marginal tax rate = 30%
average tax rate = 20%
time period = 5 year
to find out
net effect of annual depreciation on the free cash flow
solution
we know here cost of asset and Salvage value so we get depreciation cost
depreciation cost is = 11000 - 1000 = 10000
and
annual depreciation = 2000
so that Tax shield on depreciation will be
Tax shield on depreciation = 2000 × 30%
Tax shield on depreciation = 600
Approximately 0 public use airports in the United States have been sold outright to private ownership.
The U.K. was the first country to fully privatize some of its major airports. Under the Airports Act 1986, the public British Airports Authority ( BAA ) was dissolved and its property, rights, and liabilities were transferred to a new company, BAA plc.
All but one U.S. commercial airport are owned and operated by public entities, including local, regional, or state authorities with the power to issue bonds to finance some of their capital needs. Airports are landlords.
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Answer:
b. $6,600,000
Explanation:
The computation of the fee is shown below:
= Annual management fee + performance management fee
where,
Annual management fee = $400 million × 0.01 = $4 million
And, the performance management fee
= Incentive percentage × hedge fund × excess return
= 20% × $400 million × 3.25%
= $2.6 million
The excess return is
= {($445 million - $400 million) × $400 million - 8%}
= 11.25% - 8%
= 3.25%
So, the fee is
= $4 million + $2.6 million
= $6.6 million or $6,600,000
Answer:
D. Pollock cannot accept the offer because it terminated by operation of law when Jackson died.
The capital budgeting evaluation method that considers only the recovery of the initial investment and ignores additional cash flows and the timing of the cash flows is the payback method.
<h3>What is payback method?</h3>
The payback method is a budget evaluating method which evaluates how long it takes to recover the initial investment. The payback period usually in years is the time taken to recover enough cash receipts from an investment to cover the cash outflow(s) for the investment.
Therefore, the payback method ignores all cash flows that occur after the payback period and also the time value of money.
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