Question 9 Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 40%, answer the following true/false questions. Alt. A 200,000 40,000 5 Basis, $ CFBT, $ MACRS Recovery, Years Salvage Value, $ Useful Life, Years True 20,000 6 False Alt.B 300,000 50,000 5 The book value (BV) of Alt. B at the end of year 6 is greater than Salvage value. 30,000 7
Question 9 Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 40%, answer the following true/false questions. Alt. A 200,000 40,000 5 Basis, $ CFBT, $ MACRS Recovery, Years Salvage Value, $ Useful Life, Years True 20,000 6 False Alt.B 300,000 50,000 5 The book value (BV) of Alt. B at the end of year 6 is greater than Salvage value. 30,000 7
Chapter1: Making Economics Decisions
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Problem 1QTC
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Transcribed Image Text:Question 9
Pertinent information for two alternatives A and B is shown below. If
i=10% / year and the effective income tax rate is 40%, answer the
following true/false questions.
Alt. A
Basis, $
CFBT, $
MACRS Recovery,
Years
Salvage Value, $
Useful Life, Years
O True
200,000
40,000
5
False
20,000
6
Alt.B
300,000
50,000
5
The book value (BV) of Alt. B at the end of year 6 is greater than Salvage
value.
30,000
7
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