Register
A biotech company has an effective income tax rate of 40%. Recaptured depreciation is also taxed at the rate of 40%. The company must choose one of the following mutually exclusive cryogenic freezers for
19.0k views
1 vote
A biotech company has an effective income tax rate of 40%. Recaptured depreciation is also taxed at the rate of 40%. The company must choose one of the following mutually exclusive cryogenic freezers for its tissue samples. The after-tax MARR is 12% per year. Which freezer should be selected based on after-tax present worth?

User Trevorsg
by
5.1k points

1 Answer

4 votes

Answer:

Freezer 2 is the better option because it has higher present worth.

Step-by-step explanation:

A biotech company has an effective income tax rate of 40%. Recaptured depreciation-example-1
A biotech company has an effective income tax rate of 40%. Recaptured depreciation-example-2
A biotech company has an effective income tax rate of 40%. Recaptured depreciation-example-3
A biotech company has an effective income tax rate of 40%. Recaptured depreciation-example-4
A biotech company has an effective income tax rate of 40%. Recaptured depreciation-example-5
User Johna
by
4.9k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.2m questions

6.7m answers

Other Questions

Decker Tires' free cash flow was just FCF0 = $1.32. Analysts expect the company's free cash flow to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The WACC
Misk Co. purchased the following securities during 20X7 to be classified as held-to-maturity securities, trading securities, or available-for-sale securities: I. Debt securities bought and held for the
Risa has to work long hours and sometimes weekends, losing out on family time. Risa doesn't find her long hours overly stressful, but rather she sees it as her contribution to maintaining her family's
Which of the following should be considered last when searching for financing? Family members Banks Commercial finance companies Credit cards I'm guessing it's C but idk
Explain the similarities and differences between how both producers and consumer use money
Link Copied!