Redbird Corporation Provides the Following Data What Is Redbird's Tax Shield?
A)$15,000

question 42

Multiple Choice

Redbird Corporation provides the following data: $$\begin{array} { l r } \text { Cash inflows } & \$ 50,000 \\\text { Cash outflows } & \$ 43,000 \\\text { Net income } & \$ 35,000 \\\text { Depreciation deduction } & \$ 5,000 \\\text { Accumulated depreciation } & \$ 10,000 \\\text { Tax rate } & 30 \%\end{array}$$ What is Redbird's tax shield?

• A)$15,000.
• B)$12,900.
• C)$10,500.
• D)$1,500.
• E)$3,000.

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Definitions:

Investment

Disbursing funds with the prospect of accruing income or profits.

GDP

Gross Domestic Product, the total market value of all final goods and services produced within a country in a specific period, a primary indicator of economic health.

Inventory Investment

Inventory Investment is the change in the level of inventory stocks held by businesses over a certain period, which can affect overall economic output.

Fluctuates

Refers to the variation in the value or level of a variable over time.