Book value at the end of Year 5 = Purchase cost – Depreciation for 5 years
= 4,250,000*(100-14.29-24.49-17.49-12.49-8.93)%
= $948,175
Gain from Sale = 1,500,000 – 948,175 = $551,825
NSCF = 1,500,000 – 551,825*21%
= $1,384,116.75
BV at the end of Year 6 = $569,075
Loss on Sale = $194,075
Hence, there will be tax savings
NSCF = 375000 + 194075*21%
= $415,755.75
Wertheim Industries has purchased industrial equipment for a new project, at a value of $4.25 million....
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X-RAY TECHNOLOGIES purchased industrial equipment and is depreciating it using the 7-yr property class table. The original cost of the equipment was $450,000. The applicable tax rate for the company is 22%. 7-year year 14.29% 24.49% 17.49% 12.49% 4. 8.93% 8.92% 8.93% 4.46% At the end of year 4, the equipment was sold for $125,000 to upgrade to newer technology. What is the NSCF at the end of year 4? [NSCF = SP - (SP-BV) * Tax rate) Numeric Response
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ABC Company purchased $50701 of equipment 4 years ago. The equipment is 7-year MACRS property. The firm is selling this equipment today for $4916. What is the After-tax Salvage Value if the tax rate is 20%? The MACRS allowance percentages are as follows, commencing with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent.
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A project requires $315929 of equipment that is classified as 7-year property. What is the depreciation expense in Year 5 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and4.46 percent?
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Great Western Southern purchased $525,000 of equipment four years ago. The equipment is seven-year MACRS property. The firm is selling this equipment today for $150,000. What is the after-tax cash flow from this sale if the tax rate is 27 percent? The MACRS allowance percentages are as follows, commencing with Year 1: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent. Please explain your answer.
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