微信扫一扫
实时资讯全掌握
| Calamity Cauliflower Corporation is considering undertaking a capital project. The company would have to commit $24,000 of working capital in addition to an immediate outlay of $160,000 for new equipment. The project is expected to generate $100,000 of annual income for 10 years. At the end of that time, the new equipment, which will be depreciated on a straight-line basis, is expected to have a salvage value of $10, The existing equipment that would be sold to make room for the project has a historical cost of $220,000 and accumulated depreciation of $208, It has an estimated remaining useful life of 2 years and the remaining carrying amount is being depreciated on a straight-line basis. A scrap dealer has agreed to buy it for $8, The company’s effective tax rate is 40%.Calamity Cauliflower’s expected depreciation tax shield for the final year of the project is Calamity Cauliflower’s expected depreciation tax shield for the final year of the project is A. $6,400 B. $4,000 C. $2,400 D. $0 |