Self-Assessment HW7E (After-Tax cash flow from selling the old asset)

Question 27 Southern Inc. purchases an asset for $184,000. This asset qualifies as a 3-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 33.33%, year 2 = 44.45%, year 3 = 14.81%, and year 4 = 7.41%. Southern has a tax rate of 20%. If the asset is sold at the end of 3 years for $40,000, what is the cash flow from disposal? $54,261 $43,409 O $84,782 $67,826 $34,727 Question 27 of

A company purchases an asset that costs $10,000. This asset qualifies as 3-year property under MACRS. The company uses an after-tax discount rate of 12% and faces a 40% income tax rate. (Use Table 1, Table 2 and Exhibit 12.4.) Year MACRS % Depreciation Deduction Tax Savings PV Factor Present Values 1 33.33% 3,333.00 1,333.20 0.893 1,190.55 2 44.45% 4,445.00 1,778.00 0.797 1,417.07 3 14.81% 1,481.00 592.40 0.712 421.79 4 7.41% 741.00 296.40 0.636 188.51   100% 10,000.00 4,000.00   3,217.91 2. Given an after-tax discount rate of 12%, what tax rate would be needed in order for the PV of the depreciation deductions to equal $4,000?

A company purchases an asset that costs $30,000. This asset qualifies as 3-year property under MACRS The company uses an after-tax discount rate of 13% and faces a 40% income tax rate, (a) Use the appropriate present value factors found in Appendix C. Table 1, to determine the present value of the depreciation deductions for this firm over the specified four-year period. Refer to Exhibit.12.4. (Round depreciation expense to 2 decimal places.) Depreciation Deduction Tax Present Values Sipped Vear Savings 21 3. 4

Southern inc. purchases an asset for 98,000. Thus asset qualifies as a 3 year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1= 33.33% year 2: 44.45% year 3= 14.81% and year 4 = 7.41%. Southern has a tax date of 25%. If the asset is sold at the end of 2 years for 29,000 what is the cash flow disposal ? 17,404 11,129 13,923 21,755 27,194

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Basic Tax and Depreciation A company buys a production machine at a price of Rp. 70,000,000.00 and will be used for 5 years until the salvage value is zero. The gross income generated by this machine is Rp. 45,000,000.00 per year. Operating expenses for the first to fifth year are Rp. 15,000,000.00. p. 16,000,000.00, 17,000,000.00, Rp. 18,000,000.00, and Rp. 19,000,000.00 respectively. Income tax (T) is 34% and the MARR (i) is 8%. Calculate the NPV from the cash flow after-tax for the machine using the Double Declining Balance Method!

Accounting what is the taxable income

Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Churchill has a tax rate of 30%. If the asset is sold at the end of four years for $40,000, what is the cash flow from disposal?

Buy Van Lease Van Buy/Lease Term Depreciation Term Tax Rate Interest Rate After-Tax Interest Rate Buy Year Payment Depreciation Tax Deduction Net Payment Lease Year Payment Tax Deduction Net Payment $31,648 $14,065 Per Year 3 Years 1 10 Years 21.0% 7.8% 6.2% $12,236 $3,165 $665 $11,571 1 $14,065 $2,954 $11,111 2 $12,236 $3,165 $665 $11,571 2 $14,065 $2,954 $11,111 3 $12,236 $3,165 $665 $11,571 3 $14,065 $2,954 $11,111

Questions= General Account - Suppose an asset has been sold for $110,000 after two years. The asset had an initial purchase price of $100,000, a gross income of $40,000, a current book value of $60,000, a depreciation amount of $10,000, and a tax rate of 50%. What is the taxable income?

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Company A purchases P200,000 of equipment in year zero. It decides to use straight line depreciation over the expected 20 year life of the equipment. The interest rate is 14%. If its average tax rate is 40%, what is the present worth of the depreciation tax held?

Book value and taxes on sale of assets Troy Industries purchased a new machine 4 year(s) ago for $82,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule. Assume 21% ordinary and capital gains tax rates. a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $98,400; $57,400; $13,940; and $9,800. a. The remaining book value is $ (Round to the nearest dollar.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Recovery year 1 2 3 4 10 years 10% 18% 14% 12% 9% 8% 7% 6% 6% 6% 4% 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or…

Qustions= General Account - Suppose an asset has been sold for $110,000 after two years. The asset had an initial purchase price of $100,000, a gross income of $40,000, a current book value of $60,000, a depreciation amount of $10,000, and a tax rate of 50%. What is the taxable income?

Book value and taxes on sale of assets Troy Industries purchased a new machine 5 year(s) ago for $78,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule Assume 40% ordinary and capital gains tax rates. a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $93,600; $54,600; $3,900; and $2,700. a. The remaining book value is $ (Round to the nearest dollar.)

Northern Inc. purchases an asset for​ $150,000. This asset qualifies as a five−year recovery asset under MACRS with the fixed depreciation percentages as​ follows: year 1​ = 20.00%; year 2​ = 32.00%; year 3​ = 19.20%; year 4​ = 11.52%. The firm has a tax rate of​ 20%. If the asset is sold at the end of four years for​ $40,000, what is the cash flow from​ disposal?

NCF practice a) What is the ncf from the sale of this asset - purchased for $250,000, 7-year property, sold at end of year 6 for $50,000, tax rate = 21%? basis  = MACRS depreciation (as decimal) * sale price step 1: sales price - basis = gain/loss step 2: gain * loss tax rate = tax step 3: sales price - tax = ncf