Solved

What Is the Amount of the Annual Depreciation Tax Shield

Question 52

Multiple Choice

What is the amount of the annual depreciation tax shield for a firm with $200,000 in net income, $75,000 in depreciation expense and a 35 percent marginal tax rate?


A) $26,250
B) $43,750
C) $70,000
D) $75,000

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q2: Opportunity costs are evaluated for investment decisions

Q17: How do changes in working capital affect

Q33: When the real rate of interest is

Q49: What is the undiscounted cash flow in

Q53: Higher depreciation rates:<br>A)allow more depreciation over the

Q55: Which of the following statements is correct?<br>A)real

Q56: Assume that sales revenues are increasing more

Q74: Allocations of overhead should not affect a

Q82: Although the rule seems very straightforward, why

Q94: Determine the change in net working capital