Suppose a firm's tax rate is 25%. 1. What effect would a $10 million expense in...

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Suppose a firm's tax rate is 25%. 1. What effect would a $10 million expense in selling, general, and administrative (SG&A) have on this year's earnings? [Select] What effect would it have on this year's FCF? [Select] 2. What effect would a $10 million capital expenditure have on this year's earnings if the capital is depreciated at a rate of $2 million per year for five years, starting next year? [Select] What effect would it have on this year's FCF? [Select] 3. What effect would a $10 million capital expenditure have on next year's earnings if the capital is depreciated at a rate of $2 million per year for five years, starting next year? [Select] * What effect would it have on next year's FCF? [Select] Suppose a firm's tax rate is 25%. 1. What effect would a $10 million expense in selling, general, and administrative (SG&A) have on this year's earnings? [Select] What effect would it have on this year's FCF? [Select] 2. What effect would a $10 million capital expenditure have on this year's earnings if the capital is depreciated at a rate of $2 million per year for five years, starting next year? [Select] What effect would it have on this year's FCF? [Select] 3. What effect would a $10 million capital expenditure have on next year's earnings if the capital is depreciated at a rate of $2 million per year for five years, starting next year? [Select] * What effect would it have on next year's FCF? [Select]

Answer rating: 100% (QA)

1 The 10 million expense in SGA would reduce this years earnings before taxes by 10 million Since th... View the full answer