Question: 1. Why does the use of the accelerated depreciation method (instead of straight line) for income tax reporting increase an investment's value?
2. Assume that Research In Motion manufactures and sells 500,000 units of a product at $30 per unit in domestic markets. It costs $20 per unit to manufacture ($13 variable cost per unit, $7 fixed cost per unit). Can you describe a situation under which the company is willing to sell an additional 25,000 units of the product in an international market at $15 per unit?