Plant Cost $3,000,000 year 0 Sales (units) 75,000 year 1 Selling Price $30 each Sales Growth 30.0% per year Variable Costs 45% of revenue SG&A 50% of revenue SG&A Declines 4% per year Depreciation 5 years, straight-line Tax Rate 38% How much revenue is there in year 2?
Plant Cost $3,000,000 year 0 Sales (units) 75,000 year 1 Selling Price $30 each Sales Growth 30.0% per year Variable Costs 45% of revenue SG&A 50% of revenue SG&A Declines 4% per year Depreciation 5 years, straight-line Tax Rate 38% How much revenue is there in year 2?
Plant Cost $3,000,000 year 0 Sales (units) 75,000 year 1 Selling Price $30 each Sales Growth 30.0% per year Variable Costs 45% of revenue SG&A 50% of revenue SG&A Declines 4% per year Depreciation 5 years, straight-line Tax Rate 38% How much revenue is there in year 2?
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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