3) ( Below table shows the calculations for an after-tax analysis of a machine purchase alternative. EOY ВТСР Depreciation Taxable Income АТCF Deduction Income Таxes - 20,000 16,000 16,000 16,000 16,000 16,000 18,000 0. - 6,500 - 6,500 – 6,500 - 6,500 – 6,500 - 7,500 - 20,000 9,500 9,500 9,500 9,500 9,500 10,500 | 1 2 3 3,000 3,000 3,000 3,000 3,000 3,000 13,000 13,000 13,000 13,000 13,000 15,000 4 6 a) Find answers to the below questions i. What are the cost basis (price) and "annual revenues less expenses"? What is the terminal market value (or salvage value)? What is the income tax rate? ii. iii.
3) ( Below table shows the calculations for an after-tax analysis of a machine purchase alternative. EOY ВТСР Depreciation Taxable Income АТCF Deduction Income Таxes - 20,000 16,000 16,000 16,000 16,000 16,000 18,000 0. - 6,500 - 6,500 – 6,500 - 6,500 – 6,500 - 7,500 - 20,000 9,500 9,500 9,500 9,500 9,500 10,500 | 1 2 3 3,000 3,000 3,000 3,000 3,000 3,000 13,000 13,000 13,000 13,000 13,000 15,000 4 6 a) Find answers to the below questions i. What are the cost basis (price) and "annual revenues less expenses"? What is the terminal market value (or salvage value)? What is the income tax rate? ii. iii.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:3) (
Below table shows the calculations for an after-tax analysis of a machine purchase alternative.
EOY
ВТСР
Depreciation
Deduction
Тахable
Income
АТCF
Income
Таxes
- 20,000
16,000
16,000
16,000
16,000
16,000
18,000
3,000
3,000
3,000
3,000
3,000
3,000
13,000
13,000
13,000
13,000
13,000
15,000
- 6,500
- 6,500
- 6,500
- 6,500
- 6,500
- 7,500
- 20,000
9,500
9,500
9,500
9,500
9,500
1
3
4
6.
10,500
a) Find answers to the below questions
What are the cost basis (price) and "annual revenues less expenses"?
What is the terminal market value (or salvage value)?
What is the income tax rate?
i.
ii.
iii.
iv.
What is the method used for depreciation deduction?
What is the book value at the end of useful life?
V.
b) Calculate the equivalent present worth (PW) and the equivalent annual worth (AW) at an
after-tax MARR of 11%.
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