What Is the Present Value at a 10% Discount Rate

question 47

Multiple Choice

What is the present value at a 10% discount rate of the depreciation tax shield for a firm in the 35% tax bracket that purchases a $50,000 asset being depreciated straight-line over a 5-year life to a zero salvage value?

• A) $10,866
• B) $13,268
• C) $17,500
• D) $37,908

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Definitions:

Excess

An amount or quantity greater than what is normal or necessary; often associated with wastefulness or extravagance.

International Slave Trade

The global trade in humans for the purpose of slavery, forcibly transporting individuals from primarily Africa across the world, especially to the Americas.

Reopening

The act of making something open again to the public or resuming operations after it has been closed or stopped.

Support

Assistance or backing provided to individuals or causes, which can be of various forms including moral, financial, or physical aid.