A Firm Has Interest Expense of $3500 Each Year for Ten

question 109

Multiple Choice

A firm has interest expense of $3500 each year for ten years.If the tax rate is 35% and the discount rate is 8%,compute the value of the interest rate tax shield.

• A)$7091
• B)$7514
• C)$8220
• D)$8716
• E)$8802

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Definitions:

Bipedal Walking

The ability to walk upright on two legs, a characteristic feature of humans and their ancestors that distinguishes them from other primates.

Phalanges

Bones in the fingers or toes.

Mineral

In the diet, an element that is required in small amounts for normal metabolism.

Bones

Hard, dense connective tissue that forms the structural elements of the skeleton in vertebrates, providing support and protection.