Rush Corporation plans to acquire production equipment for $615,000 that will be depreciated for tax...
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Accounting
Rush Corporation plans to acquire production equipment for $615,000 that will be depreciated for tax purposes as follows: year 1, $123,000 year 2, $213,000, and in each of years 3 through 5, $93,000 per year. A 6 percent discount rate is appropriate for this asset and the company's tax rate is 40 percent. Use Exhibit A8 and Exhibit A.9. Required: a. Compute the present value of the tax shield resulting from depreciation b. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($123,000 per yer). Complete this question by entering your answers in the tabs below. Required A Required B Compute the present value of the tax shield resulting from depreciation. (Round PV factor to 3 decimal places and other Intermediate calculations to nearest whole number.) Present value of the tax shield Required B > Exercise A-13 (Algo) Present Value of Cash Flows Rush Corporation plans to acquire production equipment for $615,000 that will be depreciated for tax purposes as follows: year 1, $123,000 year 2, $213,000; and in each of years 3 through 5, $93,000 per year. A 6 percent discount rate is appropriate for this asset. and the company's tax rate is 40 percent. Use Exhibit A.8 and Exhibit A. 9. Required: a. Compute the present value of the tax shield resulting from depreciation b. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($123,000 per year). Complete this question by entering your answers in the tabs below. Required A Required Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($123,000 per year). (Round PV factor to 3 decimal places and other intermediate calculations to nearest whole number) Present value of the tax shield (Required A


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