New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

E 120: Finance - Study Guide


E 120: Finance - Study Guide E 120


Almost Ready


These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

Study Guide
50 ?




Popular in Finance

Popular in Engineering and Tech

This 2 page Study Guide was uploaded by an elite notetaker on Monday October 20, 2014. The Study Guide belongs to E 120 at University of California Berkeley taught by Alder in Fall. Since its upload, it has received 127 views. For similar materials see Finance in Engineering and Tech at University of California Berkeley.


Reviews for E 120: Finance - Study Guide


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 10/20/14
What is a tax shield Depreciation is a non cash expense For example if you have 100 for depreciation you will deduct this from your gross profit Recall the formula i EBIT Gross profit sales COGS depreciation expenses ii Tax paid EBIT tax rate iii Eg if you have 100 for depreciation you paid quot100 tax ratequot less in tax Eg tax rate 35 that means you save 35 Tax savings iv FCF EBIT 1 tax rate depreciation sales COGS depreciation 1 tax rate depreciation sales COGS 1 tax rate depreciation tax rate v The part with quotdepreciation tax rate is your tax shield This is some tax savings Selling at asset at a gain loss referring to the example covered in last class 1 Your gain loss selling price book value where book value original purchase price accumulated depreciation Asset Liabilities Cash 0 Equity Machine 110K Less accumulated depreciation 10K Machine Book Value 100K 2 Suppose we sell the machine at 50K Asset Liabilities Cash 50K Equity Earnings 50K A loss of 50K would reduce your earnings by 50K and so we saved tax of 50K tax rate If we instead sell the machine at 105K then we gain 5K and so we have to pay tax 5K tax rate


Buy Material

Are you sure you want to buy this material for

50 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Kyle Maynard Purdue

"When you're taking detailed notes and trying to help everyone else out in the class, it really helps you learn and understand the I made $280 on my first study guide!"

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.