0,000 and the firm spent $20,000 for shipping, at the end of its life the machine could be sell for $30,000. If the firm is in 34% tax bracket compute the tax savings from depreciation in year-5. a. b. $ 14,960.00 $ 13,600.00 $ 11,333.33

0,000 and the firm spent $20,000 for shipping, at the end of its life the machine could be sell for $30,000. If the firm is in 34% tax bracket compute the tax savings from depreciation in year-5. a. b. $ 14,960.00 $ 13,600.00 $ 11,333.33

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

A firm is investing in an equipment which falls in 5-years MACRS. The cost of the machine
is $200,000 and the firm spent $20,000 for shipping, at the end of its life the machine could
be sell for $30,000. If the firm is in 34% tax bracket compute the tax savings from
depreciation in year-5.
a.
b.
$ 14,960.00
$ 13,600.00
$ 11,333.33
$ 8,616.96

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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