7.2 Project Beta is a 6-year project which requires an initial outlay of $4,000.  This outlay will be depreciated using straight-line depreciation over the life of the project.  It will generate incremental revenue of $2000 per year and incremental costs (excluding depreciation) of $500.  The tax rate is 30%. What is the annual depreciation amount? a. $867 b. $667 c. $1533 d. $1333 Clear my choice

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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7.2

Project Beta is a 6-year project which requires an initial outlay of $4,000.  This outlay will be depreciated using straight-line depreciation over the life of the project.  It will generate incremental revenue of $2000 per year and incremental costs (excluding depreciation) of $500.  The tax rate is 30%.

What is the annual depreciation amount?

a.
$867
b.
$667
c.
$1533
d.
$1333
Clear my choice
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