1. Suppose that you are able to generate an annual depreciation deduction of $34,000 that would otherwise have been taxed at 00% rate each year for five years. Determine the present value of the annual tax savings using a 7.5% discount rate.
A) $41,268 B) $137,560 C) $26,683 D) None of the above
2. Which of the following is true regarding pledged receivables?
a. They are collateral for a loan.
b. Uncollected accounts are usually the responsibility of the lender.
c. The process involves factoring.
d. Both a & b
3. What is the effective rate on an 8% loan subject to a 20% minimum compensating balance? Show your work please
a. 9.6%
b. 10%
c. 8.13%
d. none of the above