What Is the Amount of Annual Interest Tax Shield for a Firm

question 15

Multiple Choice

What is the amount of annual interest tax shield for a firm with $3 million in debt that pays 12% interest if the corporate tax rate is 35%?

• A)$126,000
• B)$234,000
• C)$360,000
• D)$1,050,000

Comprehend the implications of insolvency and understand the basics of asset management and protection.

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Learn how to prepare and interpret a personal balance sheet.

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Definitions:

Reliability

The degree to which the result of a measurement, calculation, or specification can be depended on to be accurate across different instances.

Consistently Performed

Actions or behaviors that are carried out regularly and without significant variation, indicating reliability or stability in performance.

Descriptive Statistics

Mathematical procedures that allow a researcher to characterize a data pattern; these procedures include measures of central tendency and of variability.

Demand Characteristics

Cues in an experimental environment that suggest to participants what behavior is expected or desired by the researcher.