prin30004
22.06.2020 •
Mathematics
Salinas Corporation has net income of $15 million per year on net sales of $90 million per year. It currently has no long-term debt but is considering a debt issue of $20 million. The interest rate on the debt would be 7%. Salinas Corp. currently faces an effective tax rate of 40%. What would be the annual interest tax shield to Salinas Corp. if it goes through with the debt issuance?
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Ответ:
The annual interest tax shield to Salinas Corp would be of $560,000
Step-by-step explanation:
In order to calculate the annual interest tax shield to Salinas Corp if it goes through with the debt issuance we would have to calculate the following formula:
Annual Interest tax shield = Interest * tax
Interest = debt *rate of interest
Interest=$20 million * 0.07
Interest= $ 1.40 million
tax= 40%
Therefore, Annual Interest tax shield =$1.40 million * 0.40
Annual Interest tax shield = $560,000
The annual interest tax shield to Salinas Corp would be of $560,000
Ответ:
iSOCeles=socks are two and 2 are the same length
EQUALateral= all sides are =
Scalene= none are same