1 abc products needs to replace its rawhide tanning and, Ask an Expert

Finance

1. ABC Products needs to replace its rawhide tanning and molding equipment. It can be used for five years and will have no salvage value. The equipment costs $930,000. The firm can lease it for $245,000 a year, or it can borrow the money to purchase the equipment at 6%. The firm's tax rate is 34%. The CCA rate is 20% (Class . What is the present value of the depreciation tax shield?

a. $277,177 b. $258,913 c. $236,959 d. $186,000 e. $120,888

2. Pangbourne Whitchurch has preferred stock outstanding. The stock pays a dividend of $8 per share, and sells for $50. The corporate tax rate is 35%. What is the percentage cost of the preferred stock? (Enter your answer as a whole percent.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92858034

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