Seeing Red has a new project that will require fixed assets…

Seeing Red has a new project that will require fixed assets of $905,000, which will be depreciated on a 5-year MACRS schedule. The annual depreciation percentages are 20.00 percent, 32.00 percent, 19.20 percent, 11.52 percent, and 11.52 percent, respectively. The company has a tax rate of 21 percent. What is the depreciation tax shield for Year 3?

Honor Computing just purchased new equipment that cost $213,…

Honor Computing just purchased new equipment that cost $213,000. The equipment is classified as MACRS five-year property. The MACRS rates are .2, .32, and .192 for Years 1 to 3, respectively. What is the proper methodology for computing the depreciation expense for Year 2 assuming the firm opts to forego any bonus depreciation?

Azar Skin Care sells 794 units per month at a price of $47 p…

Azar Skin Care sells 794 units per month at a price of $47 per unit. By switching to a net 30 credit policy, sales should increase to 865 units while the price remains constant. The monthly interest rate is .26 percent and the variable cost per unit is $17. What is the net present value of the proposed credit policy switch?