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:

Theocratic

Pertaining to a form of government in which a deity is recognized as the supreme civil ruler, with the deity's laws being interpreted by ecclesiastical authorities.

Hierarchical

Describes a system or organization where individuals or elements are ranked one above the other according to status or authority, often found in corporate, military, and social structures.

Egalitarian

Pertaining to the belief in or practice of human equality, especially with respect to social, political, and economic rights and privileges.

Sandé Cult

A traditional society in parts of West Africa that prepares young women for adulthood and marriage through rituals and teachings.