Question

According to the Modified Accelerated Cost Recovery System (MACRS) of depreciation imposed by U.S. tax law, autos and computers must be depreciated the following way for tax purposes:
What is the present value of the interest tax shield from the purchase of an automobile for $50,000, with a cost of capital of 10 percent and a tax rate of 34 percent?
What would be the effect of a change in the tax law from MACRS to straight line depreciation?


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  • CreatedMarch 27, 2015
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