Question

Question 3 20 pts ROR Inc. bought building for its headquarters in the year 2010. The purchase cost was 792969 a new dollars and in addition it had to spend 54671 dollars adapting the space for its services. The building was in use since September 24th, 2010. YTM forecasted that in 2053 the building would have a net salvage value of $5,000,000. Using the US Straight Line Depreciation Schedule, estimate the Net Cash Flow from Salvage Value if ROR Inc. decided to sell the building on October 16th 2013 for $1328284, and that the prevailing tax rate for capital gains was 34%. (note: round your answer to the nearest cent and do not include spaces, currency signs, or commas)

Please provide formulas and answer

Answer 1

Answol As pe us GAAP, Compan must de paeciate commoicial paopet Ove 3 eOns badng Om be Calculated is cost ot Pusi chase cost 숲 구92969 $SH,67 Aditionai cost 47640 iding Total cost o아 COst Annuai pepneciation unde staalght- line method Usetul lite $47640 39 21,734-35 oCtaon septembato nec) Depue ciahan tn the yea 2010 21734 35 2 72447 Undon straigh Ine method pepa eciation inthe yea 20,2012 same as 21 734 35 0iemalns Depueciation in the yea 2013 Com an to october ) . 12 의뜨

Total depiec\afion = $7244.78 + $ 21,73H 35 21.734 35 t 181l4- 68,825. 43 buidng BOOK VaIue 0 the at the time ot Saie : Total cost - Totai depiecioahion 6,825.4 3 $g47,640 - 77,8IH S7 pa Oceed CA) $13 28,24 o0 Sale BooK Vaue o building at the- - Hime ot sAie $549, u 3 capital Gain (c- A-B) Tax lia biity 34 on capital Gain $ Su9,469 43 x 100 1g6, 819 606 Estimate the Net cash iqs tam Sov ing vaiue 1} sale o3 building is Saie vaiue $186,819 b06 labiity less: Tax Net cash las Jaom saieot baiding $\,l41,464 39