16. As the marginal tax rate goes up, the benefit from the depreciation tax shie

Question

16. As the marginal tax rate goes up, the benefit from the depreciation tax shield a. decreases b. increases c. stays the same d. can move up or down 17. If the profitably index for a project exceeds 1, then the project's net present value is positive internal rate of return is less than the projects's disount rate. payback period is less than 5 years. Accounting rate of return is greater than the project's rate of return a. b. c. d. 18. If a project's profitability index is less than 1, the project's a. b. c. d. discount rate is above its cost of capital. Internal rate of return is less than zero. Payback period is infinite. Net present value is negative

Explanation / Answer

Dear student, only one question is allowed at a time. I am answering the first question

16)

Depreciation tax shield

= Depreciation x Marginal tax rate

So, is the marginal tax rate increases, the depreciation tax shield will increase accordingly

So, as per above discussion, option b is the correct option

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.