Engineering Econ HW9 Q 3. Gamma Cruise, Inc. purchased a new tender (a small motorboat) for $35,000. Its salvage value is$7500 after its useful life of 5 years. Determine the depreciation schedule and book value overthe recovery period using MACRS with 80% bonus depreciation. Assume the equipment is inthe 5-year MACRS property class.

To solve this problem, we need to determine the depreciation schedule and book value of the asset…

Answered: 3. Gamma Cruise, Inc. purchased a new…

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

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What life cycle cost concept begins raising concerns by year 5 with any electric vehicle (EV)? If that issue affected resale value at year 5, would that affect perceived value-in-use? How exactly?
What is deflation?
A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent. The firms cost of capital is 12 percent. Compute the IRR and the NPV. Should the firm accept or reject the project?
Federal excise taxes on gasoline vary widely across the developed world. The United States has the lowest taxes at USD $0.40 per gallon (or Â£0.07 per liter), Canada has taxes of $0.60 per gallon, Japan and much of Europe is $2.00 per gallon, while Britain has the highest tax at $2.83 a gallon or Â£0.5 per liter. If gasoline taxes are intended to reduce the time losses from road congestion in urban environments and gasoline pre-tax costs about Â£0.40 per liter, why might the optimal tax in Canada be 50 percent higher than in the United States? What would be an explanation for why adjacent countries would have such different estimates of the price elasticity of demand for auto driving?16
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What is a capital gain?
What is the difference between private costs and social costs?
Is it inevitable that government must become involved in supporting investments in new technology?
Metropolitan Hospital has estimated its average monthly bed needs as N=1,000+9X where X=timeperiod(months);January2002=0 N=monthlybedneeds Assume that no new hospital additions are expected in the area in the foreseeable future. The following monthly seasonal adjustment factors have been estimated, using data from the past five years: Forecast Metropolitans bed demand for January, April, July, November, and December 2007. If the following actual and forecast values for June bed demands have been recorded, what seasonal adjustment factor would you recommend be used in making future June forecasts?
How can a small special interest group win in a situation of majority voting when the benefits it seeks flow only to a small group?
The Questor Corporation has experienced the following sales pattern over a 10-year period: Compute the equation of a trend line (similar to Equation 5.4) for these sales data to forecast sales for the next year. (Let 2004=0,2005=1, etc., for the time variable.) What does this equation forecast for sales in the year 2014? Use a first-order exponential smoothing model with a w of 0.9 to forecast sales for the year 2014.

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