What Is the Present Value at a 10 Percent Discount

question 36

Multiple Choice

What is the present value at a 10 percent discount rate of the depreciation tax shield for a firm in the 35 percent tax bracket that purchases a $50,000 asset being depreciated at 15 percent declining balance with a half-year rule, disposed from the existing asset pool at zero?

• A)$10,866
• B)$10,023
• C)$17,500
• D)$37,908

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Definitions:

Balanced Scorecard

A strategic planning and management system that organizations use to communicate what they are trying to accomplish, align daily work with strategy, prioritize projects, products, and services, and measure and monitor progress towards strategic targets.

Profit

The financial gain made in a transaction, calculated as the difference between revenue and expenses.

Not-for-profit

Organizations that operate for purposes other than generating profit, often focused on social, educational, or charitable activities.

Non-financial Measures

Refers to metrics not based on money that companies use to gauge performance, such as customer satisfaction or employee turnover.