Here's the question you clicked on:

55 members online
  • 0 replying
  • 0 viewing

miltonboy87

  • 4 years ago

Suppose a firms 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 years'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 year? What effect would it have on next years earnings?

  • This Question is Closed
  1. business1
    • 4 years ago
    Best Response
    You've already chosen the best response.
    Medals 0

    a. reduce taxable operating earnings by $10m. no effect on next year's earnings. b. taxable earnings reduced by $2m for each of five years.

  2. Not the answer you are looking for?
    Search for more explanations.

    • Attachments:

Ask your own question

Sign Up
Find more explanations on OpenStudy
Privacy Policy