A project has sales solve this accounting questions A project has sales of $49,000, costs of $38,000,depreciation of $6,000, interest expense of $300,and a tax rate of 30 percent. What is the value of thedepreciation tax shield?a. $1,800.b. $1,500.c. $4,500.d. $4,200.e. $1,645.

Hello student! A Depreciation Tax Shield is the advantage of using depreciation expense to lower…

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...

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What is the value of the depreciation tax shield?
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A project has sales of $49,000, costs of $38,000, depreciation of $6,000, interest expense of $300, and a tax rate of 30 percent. What is the value of the depreciation tax shield? a. $1,800. b. $1,500. c. $4,500. d. $4,200. e. $1,645.