Homework Answers
Option : C
I,II,III
AMORTIZATION TAX SAVINGS ARE THE SAVINGS ON TAXES.Present value of income tax savings resulting from deduction generated by the amortization of an intangiable asset.
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Testbank Question 104 Amortization tax savings are I. The savings on taxes because business equipment can...
Testbank Question 103 Relevant cash flows for long-term decisions include: I. Revenues for new projects or...
Testbank Question 103
Relevant cash flows for long-term decisions include:
I. Revenues for new projects or services
II. Variable costs for new projects or services
III. Labour or electricity savings for replacement of old
equipment
II and III only
I and III only
I and II only
I, II, and III
Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $50,000. The equipment will have...
Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $50,000. The equipment will have an initial cost of $626,000 and have an 8 year life. The salvage value of the equipment is estimated to be $114,000. If the hurdle rate is 11%, what is the approximate net present value? i have posted this same question several times but the...
Question 8 (1 point) Sadie is a full time nurse and a part time painter. Her...
Question 8 (1 point) Sadie is a full time nurse and a part time painter. Her painting qualifies as a hobby. Her gross income from painting is $7,000. Her expenses include $800 of interest on inventory loans, $5,200 of expenses in conducting business activities, and $2,000 of depreciation of equipment. Which of the following statements about Sadie's hobby activity is/are correct? Sadie will not recognize any taxable income as a result of her hobby. Sadie can deduct the interest of...
Which of the following is/are not a project's cash inflow(s)? Ignore any tax effects. I. equipment...
Which of the following is/are not a project's cash inflow(s)? Ignore any tax effects. I. equipment acquisition II. decrease in inventory III. product development cost IV. decrease in accounts payable V. product marketability studying cost Multiple Choice 0 O I, III, IV and V only 0 I, II and III only 0 land Il only 0 O I Ill and only 0 Ill and V only We can apply the the dividend growth model to estimate the cost of equity...
Arnold Company is acquiring a new machine with a life of 5 years for use on...
Arnold Company is acquiring a new machine with a life of 5 years
for use on its production line. The following data relate to this
purchase:
Testbank Question 51 Arnold Company is acquiring a new machine with a life of 5 years for use on its production line. The following data relate to this purchase: Cost of new machine Annual cost savings in cash expenses Terminal value Maintenance required in the 4th year Book value of the old machine $100,000...
Testbank Question 55 Bailey Corporation is considering modernizing its production by purchasing a new machine and...
Testbank Question 55 Bailey Corporation is considering modernizing its production by purchasing a new machine and selling an old machine. The following data have been collected on this investment: New Machine Old Machine Cost Accumulated amortization Remaining life Current salvage value Salvage value in 4 years Annual cash operating costs $40,000 $20,000 4 years $5,000 $0 $18,000 Cost Estimated useful life Salvage value in 4 years Annual cash operating costs $19,000 4 years $5,000 $14,000 The income tax rate is...
Clinton Truck Corp. is evaluating whether it should replace a 10-year old equipment. Because this is...
Clinton Truck Corp. is evaluating whether it should replace a 10-year old equipment. Because this is a replacement type of project, you set out to estimate relevant cash flows assuming the replacement decision is made. What cash flows do you think are valid and relevant in the initial period, i.e. period 0? I. Purchase cost of a new machine alone II. Sales price of the old machine alone III. Potential cost savings from using the new machine IV. After-tax salvage...
The highest federal marginal income tax rates in 2017 and 2018 are 33% in 2017 and...
The highest federal marginal income tax rates in 2017 and 2018 are 33% in 2017 and 29.6% in 2018 37% in 2017 and 39.6% in 2018 42.3% in 2017 and 39.6% in 2018 39.6% in 2017 and 37% in 2018 Question 2 With a progressive tax structure, which of the following is always true? Income Tax = Taxable Income * Marginal Tax Rate. The marginal tax rate equals the average tax rate. The average tax rate is less than the...
Question 9 1 points Save Answer Regardless of business type, accounting for business organisations will remain...
Question 9 1 points Save Answer Regardless of business type, accounting for business organisations will remain broadly similar because of the focus on a consistent financial business perspective. Sage computerised accounting software could be used by a range of business types and, to set the software ready for a new business, the system will require data initialisation. Now examine the following statements about the Sage computerised accounting system: i. System initialisation for a new business is used to set all...
Question 13 (Ch21&22) An increase in (i) tax benefits for saving; (ii) the desire of households...
Question 13 (Ch21&22) An increase in (i) tax benefits for saving; (ii) the desire of households to consume today; (iii) corporate taxes; (iv) expected future profits; and (v) the government's budget deficit will cause effects shown in the following graphs respectively. SS SS a. b. A) b, a, b, c, and a B) c, a, d, c, and a C) b, a, d, d, and a D) b, a, d, c, and a Question 14 (Ch21&22) What kind of situations...
Testbank Question 103
Relevant cash flows for long-term decisions include:
I. Revenues for new projects or services
II. Variable costs for new projects or services
III. Labour or electricity savings for replacement of old
equipment
II and III only
I and III only
I and II only
I, II, and III
Which of the following is/are not a project's cash inflow(s)? Ignore any tax effects. I. equipment acquisition II. decrease in inventory III. product development cost IV. decrease in accounts payable V. product marketability studying cost Multiple Choice 0 O I, III, IV and V only 0 I, II and III only 0 land Il only 0 O I Ill and only 0 Ill and V only We can apply the the dividend growth model to estimate the cost of equity...
Arnold Company is acquiring a new machine with a life of 5 years
for use on its production line. The following data relate to this
purchase:
Testbank Question 51 Arnold Company is acquiring a new machine with a life of 5 years for use on its production line. The following data relate to this purchase: Cost of new machine Annual cost savings in cash expenses Terminal value Maintenance required in the 4th year Book value of the old machine $100,000...
Testbank Question 55 Bailey Corporation is considering modernizing its production by purchasing a new machine and selling an old machine. The following data have been collected on this investment: New Machine Old Machine Cost Accumulated amortization Remaining life Current salvage value Salvage value in 4 years Annual cash operating costs $40,000 $20,000 4 years $5,000 $0 $18,000 Cost Estimated useful life Salvage value in 4 years Annual cash operating costs $19,000 4 years $5,000 $14,000 The income tax rate is...
Question 9 1 points Save Answer Regardless of business type, accounting for business organisations will remain broadly similar because of the focus on a consistent financial business perspective. Sage computerised accounting software could be used by a range of business types and, to set the software ready for a new business, the system will require data initialisation. Now examine the following statements about the Sage computerised accounting system: i. System initialisation for a new business is used to set all...
Question 13 (Ch21&22) An increase in (i) tax benefits for saving; (ii) the desire of households to consume today; (iii) corporate taxes; (iv) expected future profits; and (v) the government's budget deficit will cause effects shown in the following graphs respectively. SS SS a. b. A) b, a, b, c, and a B) c, a, d, c, and a C) b, a, d, d, and a D) b, a, d, c, and a Question 14 (Ch21&22) What kind of situations...
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