Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Chapter 13, Problem 6Q

Contrast the investment risk potentials of an electric vehicle manufacturer whose shares have a PE ratio of 10:1 and a coal company whose stock has a PE ratio of 2.5 to 1.

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Apex Digital Innovations is planning a project that will increase sales by $350,000 and cash expenses by $95,000. The project will cost $720,000 and will be depreciated using the straight- line method to a zero book value over the 8-year life of the project. The company's marginal tax rate is 30%. What is the yearly value of the depreciation tax shield?
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Principles of Accounting Volume 2

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