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Assume $75,000 is going to be invested in each of the following assets. Using Table 12-11 and Table 12-12. Indica...
Problem 12-26 MACRS depreciation categories (LO12-4) 54 Assume $73,000 is going to be invested in each...
Problem 12-26 MACRS depreciation categories (LO12-4) 54 Assume $73,000 is going to be invested in each of the following assets. Using Table 12-11 and Table 12-12, indicate the dollar amount of the first year's depreciation. points First Year's Depreciation eBook a. Office furniture b. Automobile c. Electric and gas utility property d. Sewage treatment plant Hint Print References Exam 3 - Chapters 9-13 table_12-11.jpg 561x473 pixels Table 12-11 Categories for depreciation write-off Class 3-year MACRS All property with ADR midpoints...
Telstar Communications is going to purchase an asset for $760,000 that will produce $370,000 per year...
Telstar Communications is going to purchase an asset for $760,000 that will produce $370,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12-12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket. Fill in the schedule below for the next four years. Year 1 Year 2 Year 3 Year 4 Earnings...
Universal Electronics is considering the purchase of manufacturing equipment with a 10-year midpoint in its asset...
Universal Electronics is considering the purchase of
manufacturing equipment with a 10-year midpoint in its asset
depreciation range (ADR). Carefully refer to Table 12–11 to
determine in what depreciation category the asset falls. (Hint: It
is not 10 years.) The asset will cost $255,000, and it will produce
earnings before depreciation and taxes of $85,000 per year for
three years, and then $40,000 a year for seven more years. The firm
has a tax rate of 25 percent. Assume the...
Universal Electronics is considering the purchase of manufacturing equipment with a 10-year midpoint in its asset...
Universal Electronics is considering the purchase of manufacturing equipment with a 10-year midpoint in its asset depreciation range (ADR). Carefully refer to Table 12-11 to determine in what depreciation category the asset falls. (Hint: It is not 10 years.) The asset will cost $235,000, and it will produce earnings before depreciation and taxes of $76,000 per year for three years, and then $37,000 a year for seven more years. The firm has a tax rate of 25 percent. Assume the...
An asset was purchased three years ago for $130,000. It falls into the five-year category for...
An asset was purchased three years ago for $130,000. It falls into the five-year category for MACRS depreciation. The firm is in a 25 percent tax bracket. Use Table 12-12. a. Compute the tax loss on the sale and the related tax benefit if the asset is sold now for $16,060. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to whole dollars.) Tax loss on the sale Tax benefit b. Compute the gain...
An asset was purchased three years ago for $100,000. It falls into the five-year category for...
An asset was purchased three years ago for $100,000. It falls
into the five-year category for MACRS depreciation. The firm is in
a 25 percent tax bracket. Use Table 12–12.
a. Compute the tax loss on the sale and the
related tax benefit if the asset is sold now for $13,060.
(Input all amounts as positive values. Do not round
intermediate calculations and round your answers to whole
dollars.)
b. Compute the gain and related tax on the sale if...
An asset was purchased three years ago for $105,000. It falls into the five-year category for...
An asset was purchased three years ago for $105,000. It falls into the five-year category for MACRS depreciation. The firm is in a 25 percent tax bracket. Use Table 12-12 a. Compute the tax loss on the sale and the related tax benefit if the asset is sold now for $13,560. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to whole dollars.) Tax loss on the sale Tax benefit b. Compute the gain...
DataPoint Engineering is considering the purchase of a new piece of equipment for $360,000. It has...
DataPoint Engineering is considering the purchase of a new piece of equipment for $360,000. It has an eight year midpoint of its asset depreciation range (ADR). It will require an additional initial investment of $180,000 in nondepreciable working capital. Sixty-five thousand dollars of this investment will be recovered after the sixth year and will provide additional cash flow for that year. Income before depreciation and taxes for the next six are shown in the following table. Use Table 12-11. Table...
The summit petroleum Corporation will purchase an asset that qualifies for three year MACRS depreciation. The...
The
summit petroleum Corporation will purchase an asset that qualifies
for three year MACRS depreciation. The cost is $430,000 in the ass
that will provide the following stream of earnings before
depreciation and taxes for the next four years:
Year 1: $200,000
Year 2: 245000
Year 3: 84,000
Year 4: 76,000
The firm is in a 40% tax bracket and has a cost of capital of
12%.
A. Calculate the net present value. Use the formula and
financial calculator methods....
The Spartan Technology Company has a proposed contract with the Digital Systems Company of Michigan. The...
The Spartan Technology Company has a proposed contract with the
Digital Systems Company of Michigan. The initial investment in land
and equipment will be $370,000. Of this amount, $250,000 is subject
to five-year MACRS depreciation. The balance is in nondepreciable
property. The contract covers six years; at the end of six years,
the nondepreciable assets will be sold for $120,000. The
depreciated assets will have zero resale value. Use Table 12-12.
Use Appendix B for an approximate answer but calculate...
Problem 12-26 MACRS depreciation categories (LO12-4) 54 Assume $73,000 is going to be invested in each of the following assets. Using Table 12-11 and Table 12-12, indicate the dollar amount of the first year's depreciation. points First Year's Depreciation eBook a. Office furniture b. Automobile c. Electric and gas utility property d. Sewage treatment plant Hint Print References Exam 3 - Chapters 9-13 table_12-11.jpg 561x473 pixels Table 12-11 Categories for depreciation write-off Class 3-year MACRS All property with ADR midpoints...
Telstar Communications is going to purchase an asset for $760,000 that will produce $370,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12-12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 25 percent tax bracket. Fill in the schedule below for the next four years. Year 1 Year 2 Year 3 Year 4 Earnings...
Universal Electronics is considering the purchase of
manufacturing equipment with a 10-year midpoint in its asset
depreciation range (ADR). Carefully refer to Table 12–11 to
determine in what depreciation category the asset falls. (Hint: It
is not 10 years.) The asset will cost $255,000, and it will produce
earnings before depreciation and taxes of $85,000 per year for
three years, and then $40,000 a year for seven more years. The firm
has a tax rate of 25 percent. Assume the...
Universal Electronics is considering the purchase of manufacturing equipment with a 10-year midpoint in its asset depreciation range (ADR). Carefully refer to Table 12-11 to determine in what depreciation category the asset falls. (Hint: It is not 10 years.) The asset will cost $235,000, and it will produce earnings before depreciation and taxes of $76,000 per year for three years, and then $37,000 a year for seven more years. The firm has a tax rate of 25 percent. Assume the...
An asset was purchased three years ago for $130,000. It falls into the five-year category for MACRS depreciation. The firm is in a 25 percent tax bracket. Use Table 12-12. a. Compute the tax loss on the sale and the related tax benefit if the asset is sold now for $16,060. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to whole dollars.) Tax loss on the sale Tax benefit b. Compute the gain...
An asset was purchased three years ago for $100,000. It falls
into the five-year category for MACRS depreciation. The firm is in
a 25 percent tax bracket. Use Table 12–12.
a. Compute the tax loss on the sale and the
related tax benefit if the asset is sold now for $13,060.
(Input all amounts as positive values. Do not round
intermediate calculations and round your answers to whole
dollars.)
b. Compute the gain and related tax on the sale if...
An asset was purchased three years ago for $105,000. It falls into the five-year category for MACRS depreciation. The firm is in a 25 percent tax bracket. Use Table 12-12 a. Compute the tax loss on the sale and the related tax benefit if the asset is sold now for $13,560. (Input all amounts as positive values. Do not round intermediate calculations and round your answers to whole dollars.) Tax loss on the sale Tax benefit b. Compute the gain...
DataPoint Engineering is considering the purchase of a new piece of equipment for $360,000. It has an eight year midpoint of its asset depreciation range (ADR). It will require an additional initial investment of $180,000 in nondepreciable working capital. Sixty-five thousand dollars of this investment will be recovered after the sixth year and will provide additional cash flow for that year. Income before depreciation and taxes for the next six are shown in the following table. Use Table 12-11. Table...
The
summit petroleum Corporation will purchase an asset that qualifies
for three year MACRS depreciation. The cost is $430,000 in the ass
that will provide the following stream of earnings before
depreciation and taxes for the next four years:
Year 1: $200,000
Year 2: 245000
Year 3: 84,000
Year 4: 76,000
The firm is in a 40% tax bracket and has a cost of capital of
12%.
A. Calculate the net present value. Use the formula and
financial calculator methods....
The Spartan Technology Company has a proposed contract with the
Digital Systems Company of Michigan. The initial investment in land
and equipment will be $370,000. Of this amount, $250,000 is subject
to five-year MACRS depreciation. The balance is in nondepreciable
property. The contract covers six years; at the end of six years,
the nondepreciable assets will be sold for $120,000. The
depreciated assets will have zero resale value. Use Table 12-12.
Use Appendix B for an approximate answer but calculate...
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