Licorne Inc. is considering a project which would involve the purchase of new manufacturing equipment at...

 

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Licorne Inc. is considering a project which would involve the purchase of new manufacturing equipment at a cost of $8,657. The equipment would be depreciated on a straight-line basis to a book value of $660 over its 6-year useful life. The firm's marginal tax rate is 35%. The amount of the annual depreciation tax shield that should be included as part of the project's cash flows would be $_ Round your final answer to 2 decimal places (example: if your answer is 12.3456, you should enter 12.35). NOTE: You should not round any intermediate work -- only round when you reach your final answer. Licorne Inc. is considering a project which would involve the purchase of new manufacturing equipment at a cost of $8,657. The equipment would be depreciated on a straight-line basis to a book value of $660 over its 6-year useful life. The firm's marginal tax rate is 35%. The amount of the annual depreciation tax shield that should be included as part of the project's cash flows would be $_ Round your final answer to 2 decimal places (example: if your answer is 12.3456, you should enter 12.35). NOTE: You should not round any intermediate work -- only round when you reach your final answer.

Answer rating: 100% (QA)

To calculate the annual depreciation tax shield we first need to find the annual depreciation expe... View the full answer