show yoir workHomework Answers
| Equipment Cost | $ 2,00,000.00 | |||
| Useful life | 20 | Years | ||
| Straight Line Depreciation=(Cost-Salvage Value) /Useful life | ||||
| Depreciation=($200000-0)/20= | $ 10,000.00 | |||
| Annual Depreciation tax shield=($10000*40%)=(A) | $ 4,000.00 | |||
| P.V of annuity 20 years @ 14%=(B) | 6.62313 | |||
| Present worh of the after tax Depreciation recovery($4000*6.62313)=(A)*(B) | $ 26,492.52 | |||
| Ans (C ) | Present worh of the after tax Depreciation recovery | $ 26,500.00 | nearest dollar | |
Add Answer to:
show yoir work
2. Company A purchases $200, 000 of equipment in year 0. It decides...
3. Company A purchases $200,000 of equipment in year 0. It decides to use straight-line depreciation...
3. Company A purchases $200,000 of equipment in year 0. It decides to use straight-line depreciation over the expected 20 yr life of the equipment. The interest rate is 16%. If its overall tax rate is 40%, what is the present worth of the after-tax depreciation recovery? $23,115 B. $23,315 C. $23,515 D. $23,715 A. 4 A. plan A B. Plan B C. Plan C D. Plan A or B 5. A machine costs $10,000 and can be depreciated over...
Income Statement, Depreciation table (20 points) Equipment with a first cost of $120.000 is depreciated by MACRS wi...
Income Statement, Depreciation table (20 points) Equipment with a first cost of $120.000 is depreciated by MACRS wil period. The estimated expenses are $17,500 each year, annual revenues effective tax rate is 40%. preciated by MACRS with a 5-year recovery year; annual revenues are $90,000. The (a) (10 points) Construct a table showing yearly depreciation rate, dep book value to fully depreciate the machine. any depreciation rate, depreciation amount, and 10 points) Construct a complete income statement (using the format...
Dickens, Inc. purchases and puts into service equipment costing $750,000. The equipment has a six-year useful...
Dickens, Inc. purchases and puts into service equipment costing $750,000. The equipment has a six-year useful life and no salvage value. Dickens faces a tax rate on pretax income of 30%. a. Calculate the present value of the tax benefit of using double-declining balance rather than straight-line depreciation over the life of the equipment. Use a discount rate of 10%. b. Calculate the present value of the tax benefit of using double-declining balance rather than straight-line depreciation over the life...
One year ago, your company purchased a machine used in manufacturing for $ 95 comma 000....
One year ago, your company purchased a machine used in manufacturing for $ 95 comma 000. You have learned that a new machine is available that offers many advantages; you can purchase it for $ 160 comma 000 today. It will be depreciated on a straight-line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $ 35 comma 000 per year...
One year ago, your company purchased a machine used in manufacturing for $ 105 000. You...
One year ago, your company purchased a machine used in manufacturing for $ 105 000. You have learned that a new machine is available that offers many advantages; you can purchase it for $ 155 000 today. It will be depreciated on a straight-line basis over ten years and has no salvage value. You expect that the new machine will produce a gross margin (revenues minus operating expenses other than depreciation) of $ 40 000 per year for the next...
show work You own some equipment that you purchased 3 years ago at a cost of...
show work
You own some equipment that you purchased 3 years ago at a cost of $350,000. The equipment is 5-year property for MACRS. You are considering selling the equipment today for $123,000. Which one of the following statements is correct if your tax rate is (40%? initial : 350,000 MACRS 5-year property Year Rate 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 0 straight line 350,000 - 123,000 w @ a. The tax due on the sale is $26,425 b. The...
Casinos recently acquired a newly built hotel and casino in Atlantic City. The cost of the complex was $ 4 comma 200 comma 000 with a 6-year useful life and no residual value expected. Milton deprec...
Casinos recently acquired a newly built hotel and casino in Atlantic City. The cost of the complex was $ 4 comma 200 comma 000 with a 6-year useful life and no residual value expected. Milton depreciates its buildings using the straight-line method for financial reporting and an accelerated method for tax purposes. The tax depreciation percentages for the first 2 years are 20% and 32%, respectively. Milton is subject to a 40 % income tax rate. Read the requirements...
One year ago, your company purchased a machine used in manufacturing for $ 95 comma 000....
One year ago, your company purchased a machine used in manufacturing for $ 95 comma 000. You have learned that a new machine is available that offers many advantages; you can purchase it for $ 160 comma 000 today. It will be depreciated on a straight-line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $ 40 comma 000 per year...
One year ago, your company purchased a machine used in manufacturing for $ 105 comma 000$105,000....
One year ago, your company purchased a machine used in manufacturing for $ 105 comma 000$105,000. You have learned that a new machine is available that offers many advantages; you can purchase it for $ 160 comma 000$160,000 today. It will be depreciated on a straight-line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $ 35 comma 000$35,000 per year...
Operating cash inflows Afirm is considering renewing its equipment to meet increased demand for its product....
Operating cash inflows Afirm is considering renewing its equipment to meet increased demand for its product. The cost of equipment modifications is $1.97 million plus $108,000 in installation costs. The firm will depreciate the equipment modifications under MACRS, using a 5-year recovery period (see table !). Additional sales revenue from the renewal should amount to $1.17 million per year, and additional operating expenses and other costs (excluding depreciation and interest) will amount to 42% of the additional sales. The firm...
3. Company A purchases $200,000 of equipment in year 0. It decides to use straight-line depreciation over the expected 20 yr life of the equipment. The interest rate is 16%. If its overall tax rate is 40%, what is the present worth of the after-tax depreciation recovery? $23,115 B. $23,315 C. $23,515 D. $23,715 A. 4 A. plan A B. Plan B C. Plan C D. Plan A or B 5. A machine costs $10,000 and can be depreciated over...
Income Statement, Depreciation table (20 points) Equipment with a first cost of $120.000 is depreciated by MACRS wil period. The estimated expenses are $17,500 each year, annual revenues effective tax rate is 40%. preciated by MACRS with a 5-year recovery year; annual revenues are $90,000. The (a) (10 points) Construct a table showing yearly depreciation rate, dep book value to fully depreciate the machine. any depreciation rate, depreciation amount, and 10 points) Construct a complete income statement (using the format...
Dickens, Inc. purchases and puts into service equipment costing $750,000. The equipment has a six-year useful life and no salvage value. Dickens faces a tax rate on pretax income of 30%. a. Calculate the present value of the tax benefit of using double-declining balance rather than straight-line depreciation over the life of the equipment. Use a discount rate of 10%. b. Calculate the present value of the tax benefit of using double-declining balance rather than straight-line depreciation over the life...
show work
You own some equipment that you purchased 3 years ago at a cost of $350,000. The equipment is 5-year property for MACRS. You are considering selling the equipment today for $123,000. Which one of the following statements is correct if your tax rate is (40%? initial : 350,000 MACRS 5-year property Year Rate 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 0 straight line 350,000 - 123,000 w @ a. The tax due on the sale is $26,425 b. The...
Operating cash inflows Afirm is considering renewing its equipment to meet increased demand for its product. The cost of equipment modifications is $1.97 million plus $108,000 in installation costs. The firm will depreciate the equipment modifications under MACRS, using a 5-year recovery period (see table !). Additional sales revenue from the renewal should amount to $1.17 million per year, and additional operating expenses and other costs (excluding depreciation and interest) will amount to 42% of the additional sales. The firm...
Most questions answered within 3 hours.
-
A 0.500-kg object, suspended from an ideal spring of spring
constant 30.2 N/m, is oscillating vertically....
asked 2 minutes ago -
Please help and show work. I keep getting the wrong answers for
these problems
1. Cell...
asked 28 seconds from now -
If there is a SNP in the read with respect to the
reference genome, how would a...
asked 1 minute ago -
Early black-and-white television sets used an electron beam to
draw a picture on the screen. The...
asked 4 minutes ago -
What is the standard error of M (denoted as
σM ) ?
Options:
The mean of...
asked 28 minutes ago -
Explain the role of n, the sample size, in determining the size
of a generated confidence...
asked 17 minutes ago -
Kelsey Drums, Inc., is a well-established supplier of fine
percussion instruments to orchestras all over the...
asked 31 minutes ago -
In a criminal case, the state must not prove its case beyond a
reasonable doubt. T/F
asked 35 minutes ago -
5.6 dm^3 of gaseous HCl (as measured in normal conditions) is
dissolved in 100 cm^3 of...
asked 45 minutes ago -
The hammer throw is a track-and-field event in which a 7.2-kg
ball (the ''hammer''), starting from...
asked 1 hour ago -
Evaluate a specific listening situation using the Sapir-Whorf
and Bernstein hypothesis. What was thecontext? What was...
asked 1 hour ago -
Recall that if X is a Student’s t random variable with n df,
then by definition...
asked 1 hour ago