Multiple Choice
Matty's Place is considering the installation of a new computer system that will cut annual operating costs by $12,000.The system will cost $42,000 to purchase and install.This system is expected to have a life of 5 years and will be depreciated to zero using straight-line depreciation.Ignore bonus depreciation.What is the amount of the earnings before interest and taxes for each year of this project if the tax rate is 21 percent?
A) −$20,400
B) $5,400
C) $3,600
D) $12,000
E) $8,400
Correct Answer:
Verified
Correct Answer:
Verified
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