A Certain Asset Costs $84,000

question 24

Multiple Choice

A certain asset costs $84,000. It has a real physical life of 10 years, but it can be depreciated using straight-line depreciation over 7 years for tax accounting purposes. If a firm is in the
34% tax bracket, what will the tax savings from the depreciation be?

• A)$7,920
• B)$4,080
• C)$2,856
• D)$5,544

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Definitions:

Glomerulus

A network of capillaries located in the beginning of a nephron in the kidney where blood filtration takes place.

Vasa Recta

Specialized capillary that extends from the cortex of the kidney into the medulla and then back to the cortex.

Peritubular Capillary

Capillary network located in the cortex of the kidney; associated with the distal and proximal convoluted tubules.

Nephron

The basic structural and functional unit of the kidney, responsible for water and electrolyte balance.