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GEMINDTAP Search this course Problems - Financial Planning & Analysis eBook Problem 9-05 An asset costs...
A firm has earnings of $23,000 before interest, depreciation, and taxes. A new piece of equipment...
A firm has earnings of $23,000 before interest, depreciation, and taxes. A new piece of equipment is installed at a cost of $9,000. The equipment will be depreciated over five years, and the firm pays 15 percent of its earnings in taxes. What are the earnings and cash flows for the firm in years 2 and 5, using the two methods of depreciation? Use Exhibit 9.4 to answer the questions. Round your answers to the nearest dollar. Modified Accelerated Straight-line...
Blossom Corporation just purchased computing equipment for $15,000. The equipment will be depreciated using a five-year...
Blossom Corporation just purchased computing equipment for $15,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $10,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, e.g. 15.25.) EXHIBIT 11.7 MACRS Depreciation Schedules by Allowable Recovery Period 6.68 6.55 The MACRS schedule lists the tax depreciation rates that firms use for...
Blossom Corporation just purchased computing equipment for $20,000. The equipment will be depreciated using a five-year...
Blossom Corporation just purchased computing equipment for $20,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $13,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, eg. 15.25.) MACRS Depreciation Schedules by Allowable Recovery Period EXHIBIT 11.7 The MACRS schedule lists the tax depreciation rates that firms use for assets placed...
Wildhorse Corporation just purchased computing equipment for $24,000. The equipment will be depreciated using a five-year...
Wildhorse Corporation just purchased computing equipment for
$24,000. The equipment will be depreciated using a five-year MACRS
depreciation schedule. If the equipment is sold at the end of its
fourth year for $14,000, what are the after-tax proceeds from the
sale, assuming the marginal tax rate is 35 percent? (Round answer
to 2 decimal places, e.g. 15.25.)
After Tax Proceeds: ____________
MACRS Depreciation Schedules by Allowable Recovery Period EXHIBIT 11.7 The MACRS schedule lists the tax depreciation rates that firms...
Required information Blackwater Spring and Metal utilizes the same computerized spring-forming machinery in its U.S. and...
Required information Blackwater Spring and Metal utilizes the same computerized spring-forming machinery in its U.S. and Malaysian plants. The first cost was $750,000 with S $150,000 after n 10 years. MACRS (Modified Accelerated Cost Recovery System) depreciation with n= 5 years is applied in the United States, and standard SL depreciation with n= 10 years is used by the Malaysian facility Depreciation Rate (6) for Each MACRS Recovery Period in Years n 10 10.00 18.00 14.40 11.52 9.22 n 20...
Current Attempt in Progress Wildhorse Corporation just purchased computing equipment for $30,000. The equipment will be...
Current Attempt in Progress Wildhorse Corporation just purchased computing equipment for $30,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $12,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, e.g. 15.25.) EXHIBIT 11.7 MACRS Depreciation Schedules by Allowable Recovery Period The MACRS schedule lists the tax depreciation rates that firms...
n asset costs $270,000 and is classified as a ten-year asset. What is the annual depreciation...
n asset costs $270,000 and is classified as a ten-year asset. What is the annual depreciation expense for the first three years under the straight-line and the modified accelerated cost recovery systems of depreciation? Be sure to apply the half-year convention to straight-line depreciation. Use Exhibit 9.4 to answer the question. Round your answers to the nearest dollar. Straight-line depreciation: Year Depreciation expense 1 $ 2 $ 3 $ Accelerated cost recovery system of depreciation: Year Depreciation expense 1 $ ...
Question 3 (10 points): Using the Modified Accelerated Cost Recovery method (table A-1), calculate the depreciation...
Question 3 (10 points):
Using the Modified Accelerated Cost Recovery method (table A-1),
calculate the depreciation of $2,500,000 property for 7-year half
-year convention. Note: you just need to calculate the
depreciation; you do not need to use it in any further
calculations.
Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property Half-Year Convention Depreciation rate for recovery period Year 3-year 5-year 7-year 10-year 15-year 20-year 33.33% 44.45 14.81 20.00% 32.00 19.20 11.52 11.52 14.29% 24.49 17.49 12.49 8.93...
Oriale Corporation just purchased computing equipment for $17,000. The equipment will be depreciated using a five-year...
Oriale Corporation just purchased computing equipment for $17,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $12,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, eg. 15.25.) EXHIBIT 11.7 MACRS Depreciation Schedules by Allowable Recovery Period 9.50 6.68 The MACRS schedule lists the tax depreciatice rules that firms use for...
Sheffield Corporation purchased an asset at a cost of $58,750 on March 1, 2020. The asset...
Sheffield Corporation purchased an asset at a cost of $58,750 on March 1, 2020. The asset has a useful life of 8 years and a salvage value of $4,700. For tax purposes, the MACRS class life is 5 years. MACRS Depreciation Rates by Class of Property Recovery Year 3-year (200% DB) 5-year (200% DB) 7-year (200% DB) 10-year (200% DB) 15-year (150% DB) 20-year (150% DB) 1 33.33 20.00 14.29 10.00 5.00 3.750 2 44.45 32.00 24.29 18.00 9.50 7.219 ...
A firm has earnings of $23,000 before interest, depreciation, and taxes. A new piece of equipment is installed at a cost of $9,000. The equipment will be depreciated over five years, and the firm pays 15 percent of its earnings in taxes. What are the earnings and cash flows for the firm in years 2 and 5, using the two methods of depreciation? Use Exhibit 9.4 to answer the questions. Round your answers to the nearest dollar. Modified Accelerated Straight-line...
Blossom Corporation just purchased computing equipment for $15,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $10,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, e.g. 15.25.) EXHIBIT 11.7 MACRS Depreciation Schedules by Allowable Recovery Period 6.68 6.55 The MACRS schedule lists the tax depreciation rates that firms use for...
Blossom Corporation just purchased computing equipment for $20,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $13,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, eg. 15.25.) MACRS Depreciation Schedules by Allowable Recovery Period EXHIBIT 11.7 The MACRS schedule lists the tax depreciation rates that firms use for assets placed...
Wildhorse Corporation just purchased computing equipment for
$24,000. The equipment will be depreciated using a five-year MACRS
depreciation schedule. If the equipment is sold at the end of its
fourth year for $14,000, what are the after-tax proceeds from the
sale, assuming the marginal tax rate is 35 percent? (Round answer
to 2 decimal places, e.g. 15.25.)
After Tax Proceeds: ____________
MACRS Depreciation Schedules by Allowable Recovery Period EXHIBIT 11.7 The MACRS schedule lists the tax depreciation rates that firms...
Required information Blackwater Spring and Metal utilizes the same computerized spring-forming machinery in its U.S. and Malaysian plants. The first cost was $750,000 with S $150,000 after n 10 years. MACRS (Modified Accelerated Cost Recovery System) depreciation with n= 5 years is applied in the United States, and standard SL depreciation with n= 10 years is used by the Malaysian facility Depreciation Rate (6) for Each MACRS Recovery Period in Years n 10 10.00 18.00 14.40 11.52 9.22 n 20...
Current Attempt in Progress Wildhorse Corporation just purchased computing equipment for $30,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $12,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, e.g. 15.25.) EXHIBIT 11.7 MACRS Depreciation Schedules by Allowable Recovery Period The MACRS schedule lists the tax depreciation rates that firms...
Question 3 (10 points):
Using the Modified Accelerated Cost Recovery method (table A-1),
calculate the depreciation of $2,500,000 property for 7-year half
-year convention. Note: you just need to calculate the
depreciation; you do not need to use it in any further
calculations.
Table A-1. 3-, 5-, 7-, 10-, 15-, and 20-Year Property Half-Year Convention Depreciation rate for recovery period Year 3-year 5-year 7-year 10-year 15-year 20-year 33.33% 44.45 14.81 20.00% 32.00 19.20 11.52 11.52 14.29% 24.49 17.49 12.49 8.93...
Oriale Corporation just purchased computing equipment for $17,000. The equipment will be depreciated using a five-year MACRS depreciation schedule. If the equipment is sold at the end of its fourth year for $12,000, what are the after-tax proceeds from the sale, assuming the marginal tax rate is 35 percent? (Round answer to 2 decimal places, eg. 15.25.) EXHIBIT 11.7 MACRS Depreciation Schedules by Allowable Recovery Period 9.50 6.68 The MACRS schedule lists the tax depreciatice rules that firms use for...
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