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Samson Company Will Purchase a Van for $40,000

Question 92

Multiple Choice

Samson Company will purchase a van for $40,000.It will have a depreciable life of 5 years and no terminal salvage value.Assume a tax rate of 30% and a required after-tax rate of return of 12%.The present value of the total after-tax savings from depreciation, if the straight-line method is used, is _____.


A) $8,652
B) $16,000
C) $24,000
D) $17,303

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