Consider a project with inflows of $20,000 and outflows of $13,000. If the tax rate is 33%, and if the cash flow in Year 1 is $6,500, what is the depreciation amount? Select one: a. $5,485 b. $5,387 c. $5,333 d. $5,438 e. $5,529

Consider a project with inflows of $20,000 and outflows of $13,000. If the tax rate is 33%, and if the cash flow in Year 1 is $6,500, what is the depreciation amount? Select one: a. $5,485 b. $5,387 c. $5,333 d. $5,438 e. $5,529

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 15EA: Project A costs $5,000 and will generate annual after-tax net cash inflows of $1,800 for five years....

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Consider a project with inflows of $20,000 and outflows of $13,000. If the tax rate is 33%, and if the cash flow in Year 1 is $6,500, what is the depreciation amount?

Select one:

$5,485

$5,387

$5,333

$5,438

$5,529

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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