Multiple Choice
Last year Almazan Software reported $10.50 million of sales,$6.25 million of operating costs other than depreciation,and $1.30 million of depreciation.The company had $5.00 million of bonds that carry a 6.5% interest rate,and its federal-plus-state income tax rate was 35%.This year's data are expected to remain unchanged except for one item,depreciation,which is expected to increase by $0.70 million.By how much will net income change as a result of the change in depreciation? The company uses the same depreciation calculations for tax and stockholder reporting purposes.
A) −$0.432
B) −$0.455
C) −$0.478
D) −$0.502
E) −$0.527
Correct Answer:
Verified
Correct Answer:
Verified
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