5 An Asian Airline jet costs $28 million and is expected to fly 200 million kilometres during its 10-year life. Residual value is expected to be zero because the plane was used when acquired. If the plane travels 54 million kilometres in the first year, how much depreciation should Asian Airline record under the units-of-production method? a $2.8 million b $7.56 million c $5.6 million d cannot be determined from the data given

5 An Asian Airline jet costs $28 million and is expected to fly 200 million kilometres during its 10-year life. Residual value is expected to be zero because the plane was used when acquired. If the plane travels 54 million kilometres in the first year, how much depreciation should Asian Airline record under the units-of-production method? a $2.8 million b $7.56 million c $5.6 million d cannot be determined from the data given

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

10) (Break-even analysis) The Marvel Mfg. Company is considering whether or not to construct a new robotic production facility. The cost of this new facility is $612,000 and it is expected to have a six-year life with annual depreciation expense of $102,000 and no salvage value. Annual sales from the new facility are expected to be 2,010 units with a price of $1,060 per unit. Variable production costs are $630 per unit, and fixed cash expenses are $76,000 per year. a. Find the accounting and the cash break-even units of production. b. Will the plant make a profit based on its current expected level of operations? c. Will the plant contribute cash flow to the firm at the expected level of operations? Question content area bottom Part 1 a. The accounting break-even units of production is______units.
A3
Thad, a single taxpayer, has taxable income before the QBI deduction of $174,500. Thad, a CPA, operates an accounting practice as a single member LLC (which he reports as a sole proprietorship). During 2020, his proprietorship generates qualified business income of $139,600, W–2 wages of $104,700, and $14,000 of qualified property. Assume the QBI amount is net of the self-employment tax deduction. If required, round any division to two decimal places. Round your final answer to the nearest dollar. What is Thad's qualified business income deduction?
2 You have been asked to evaluate the proposed purchase of a new machine by your company. The price of the new machine is £250,000, and it will cost an additional £25,000 to adapt it to the company’s purpose. The company might try to sell the machine after five years, but it is very unlikely to get a meaningful (material) price. Depreciation is based on the straight-line method. Use of the machine would require an increase in net working capital of £15,000, which would be recovered in the final year of the investment. The machine is expected to save the firm £50,000 per year in operating costs. The corporate tax rate is 40%. Required: a. What is the initial investment outlay associated with the machine purchase? b. What is the terminal cash flow in year five? c. Critically examine the treatment of working capital in the above case. d. If the project’s required rate of return is 15%, should the equipment be purchased? e. Undertake a detailed critical evaluation of how your company could…
Jitu Don't upload any image
Net Salvage Value Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $23.2 million, of which 85% has been depreciated. The used equipment can be sold today for $5.8 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
Ef 10.
None
None
None
16. A car costs P800,000, 4 years ago, and the salvage value is P50,000, 6 years from now. If it is to be replaced by a new one and the trade-in value is #450,000, find the sunk cost if money is worth 12% O
2