all else equal, how does a decrease in a depreciation schedule ( a 6-year schedule to...
all else equal, how does a decrease in a depreciation schedule ( a 6-year schedule to a 4-year schedule) affect NPV when a tax rate of 30%?
a. not enough info.
b. no NPV impact
c. Increases NPV
d. Decrease in NPV
Homework Answers
please find below the solution let me know if you need any clarification.
rate positively
correct answer is option : Increases NPV .
Exp: NPV will increase if the depreciation schedule reduced from 6 to 4 because now more tax yield on depreciation will be available at early stage and will improve the NPV.
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