Why would you choose MACRS over Straighline Depreciation? AND What is the implication for incremental Cash...
Why would you choose MACRS over Straighline Depreciation? AND What is the implication for incremental Cash Flow analysis?
Homework Answers
MACRS Depreciation allows higher deduction during initial years. This increases the present value of a project since the tax shield is received much earlier as compared to straight line method.
Incremental cash flow analysis is important for analysis of a capital budgeting project. It only considers the additional cash flows associated with the project. The irrelevantand sunk costs are ignored for analysis and hence only the additional cash inflows and outflows are taken into account.
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Why would you choose MACRS over Straighline Depreciation? AND
What is the implication for incremental Cash...
Should financing costs be included as an incremental cash flow in capital budgeting analysis?? why or why not??
Should financing costs be included as an incremental cash flow in capital budgeting analysis?? why or why not??
2. Explain the concept of an incremental economic analysis. 3. What economic criterion would you use to choose th...
2. Explain the concept of an incremental economic analysis. 3. What economic criterion would you use to choose the best piece of equipment among three alternatives, each with a different operating cost, capital cost, and equipment life? 4. Do you agree with the statement "Monte-Carlo simulation enables the design engi- neer to eliminate risk in economic analysis"? Please explain your answer. 5. In evaluating a large project, what are the advantages and disadvantages of proba- bilistic analysis?
2. Explain the...
What are the two possible locations for a chart in Excel? Why would you choose one over the other?
What are the two possible locations for a chart in Excel? Why would you choose one over the other?
why would you choose raja yoga in hinduism over all the other yogas
why would you choose raja yoga in hinduism over all the other yogas
QUESTION 2 Depreciation must be considered when evaluating the incremental operating cash flows associated with a...
QUESTION 2 Depreciation must be considered when evaluating the incremental operating cash flows associated with a capital budgeting project because: A. it represents a tax-deductible cash expense. B. the firm has a cash outflow equal to the depreciation expense each year. C. depreciation is a cash flow that doesn't change. D. depreciation has an impact on the taxes paid by the firm, which is a cash flow. E. depreciation is a sunk cost. QUESTION 3 Diversifiable risk includes _____. A....
tax rate schedule , i cant figure it out MACRS depreciation expense and accounting cash flow...
tax rate schedule , i cant figure it out
MACRS depreciation expense and accounting cash flow Pavlovich Instruments, Inc., a maker of precision telescopes, expects to report pretax income of $430,000 this year. The company's financial manager is considering the timing of a purchase of new computerized lens grinders. The grinders will have an installed cost of $82,900 and a cost recovery period of 5 years. They will be depreciated using the MACRS schedule Corporate tax rates are given i...
i have doubt that it is given macrs depreciation for 3 years but rates are given...
i have doubt that it is given macrs depreciation for 3
years but rates are given for 4 years please clear my doubt thanks
in advance
The president of real-time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer price is $50,000 and it falls into MACRS-3 year class. The purchase of the computer would require an increase in spare parts inventory of $3,000. Account payables will also increase by $2,000. The computer would...
Ch 12: End of Chapter Problems - Cash Flow Estimation and Risk Analysis BOOK You must...
Ch 12: End of Chapter Problems - Cash Flow Estimation and Risk Analysis BOOK You must evaluate a proposal to buy a new milling machine. The base price is $113,000, and shipping and installation costs would add another $13,000. The machine falls into the MACRS 3 year class, and it would be sold after 3 years for $62,150. The applicable depreciation rates are 30%, 15%, 15%, and 7%. The machine would require a $7,500 increase in net operating working capital...
What are some of the reasons why a company would choose debt financing over other alternatives,...
What are some of the reasons why a company would choose debt financing over other alternatives, such as issuing stock, etc.?
Please complete Part B MACRS depreciation expense and accounting cash flow Pavlovich Instruments, Inc., a maker...
Please complete Part B
MACRS depreciation expense and accounting cash flow Pavlovich Instruments, Inc., a maker of precision telescopes, expects to report pretax income of $425,000 this year. The company's financial manager is considering the timing of a purchase of new computerized lens grinders. The grinders will have an installed cost of $78,500 and a cost recovery period of 5 years. They will be depreciated using the MACRS schedule A. Corporate tax rates are given A a. If the firm...
2. Explain the concept of an incremental economic analysis. 3. What economic criterion would you use to choose the best piece of equipment among three alternatives, each with a different operating cost, capital cost, and equipment life? 4. Do you agree with the statement "Monte-Carlo simulation enables the design engi- neer to eliminate risk in economic analysis"? Please explain your answer. 5. In evaluating a large project, what are the advantages and disadvantages of proba- bilistic analysis?
2. Explain the...
tax rate schedule , i cant figure it out
MACRS depreciation expense and accounting cash flow Pavlovich Instruments, Inc., a maker of precision telescopes, expects to report pretax income of $430,000 this year. The company's financial manager is considering the timing of a purchase of new computerized lens grinders. The grinders will have an installed cost of $82,900 and a cost recovery period of 5 years. They will be depreciated using the MACRS schedule Corporate tax rates are given i...
i have doubt that it is given macrs depreciation for 3
years but rates are given for 4 years please clear my doubt thanks
in advance
The president of real-time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer price is $50,000 and it falls into MACRS-3 year class. The purchase of the computer would require an increase in spare parts inventory of $3,000. Account payables will also increase by $2,000. The computer would...
Ch 12: End of Chapter Problems - Cash Flow Estimation and Risk Analysis BOOK You must evaluate a proposal to buy a new milling machine. The base price is $113,000, and shipping and installation costs would add another $13,000. The machine falls into the MACRS 3 year class, and it would be sold after 3 years for $62,150. The applicable depreciation rates are 30%, 15%, 15%, and 7%. The machine would require a $7,500 increase in net operating working capital...
Please complete Part B
MACRS depreciation expense and accounting cash flow Pavlovich Instruments, Inc., a maker of precision telescopes, expects to report pretax income of $425,000 this year. The company's financial manager is considering the timing of a purchase of new computerized lens grinders. The grinders will have an installed cost of $78,500 and a cost recovery period of 5 years. They will be depreciated using the MACRS schedule A. Corporate tax rates are given A a. If the firm...
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