cadorsey4930
Jul 11, 2010, 11:57 AM
Suppose a firm's tax rate is 35%.
a) What effect would a $10 million operating expense have on this year's earnings? What effect would it have on next year's earnings?
b) What effect would a $10 million capital expense have on this year's earnings if the capital is depreciated at a rate of $2 million per year for five years? What effect would it have on next year's earnings?
a) What effect would a $10 million operating expense have on this year's earnings? What effect would it have on next year's earnings?
b) What effect would a $10 million capital expense have on this year's earnings if the capital is depreciated at a rate of $2 million per year for five years? What effect would it have on next year's earnings?