Last Year Tiemann Technologies Reported $10,500 of Sales,$6,250 of Operating

question 61

Multiple Choice

Last year Tiemann Technologies reported $10,500 of sales,$6,250 of operating costs other than depreciation,and $1,300 of depreciation.The company had no amortization charges,it had $5,000 of bonds that carry a 6.5% interest rate,and its federal-plus-state income tax rate was 35%.This year's data are expected to remain unchanged except for one item,depreciation,which is expected to increase by $750.By how much will net after-tax income change as a result of the change in depreciation? The company uses the same depreciation calculations for tax and stockholder reporting purposes.

• A) -0463.13
• B) -10487.50
• C) -11.88
• D) -537.47
• E) -564.34

---

Definitions:

Survivorship Bias

Bias in the average returns of a sample of funds induced by excluding past returns on funds that left the sample because they happened to be unsuccessful.

Self-Selection Bias

Refers to the bias introduced into research results when individuals select themselves into a group, causing a non-random sample.

Statistical Arbitrage

Use of quantitative systems to uncover many perceived misalignments in relative pricing and ensure profit by diversifying across all of these small bets.

Quantitative Techniques

Mathematical and statistical methods used to analyze numerical data, often applied in economics, finance, and operational research to facilitate decision-making.