7-34. Refer to Problem 6-77. The alternatives all havea MACRS (GDS) property class of three years. Ifthe effective income tax rate is 25% and the after-taxMARR = 11.25% per year, which alternative shouldbe recommended? Is this the same recommendation youmade when the alternatives were analyzed on a before-taxbasis? (7.10)

Answered: Image /qna-images/answer/02539883-cf09-4910-b0b0-948251f888cc.jpg

Answered: 7-34. Refer to Problem 6-77. The…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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urgent A firm can purchase a centrifugal separator (5-year MACRS property) for $17,000. The estimated salvage value is $4,000 after a useful life of six years. Operating and maintenance (O&M) costs for the first year are expected to be$1,700. These O&M costs are projected to increase by $500 per year each year thereafter. The income tax rate is 25% and the MARR is 13% after taxes. What must the uniform annual benefits be for the purchase of the centrifugal separator to be economical on an after-tax basis? The uniform annual benefits should be........... (Round to the nearest dollar.)
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A rural community/company is considering an investment in a cottage industry for which the net cash flows have been estimated as follows: i) What is the NPV if the discount rate is 10%? ii) Using discount rates of 10% and 14% calculate the IRR? iii) Is this project acceptable?
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Please answer le lo please answer fast please arjent help please ASAP pls
A business invests $5000 and initially plans to achieve annual revenue of $1100/yr with $200/yr expenses (starting at the end of ar 1) for ten years. No market value if used for ten years. 1.If at the end of the sixth year, instead, the investment is sold for $1000, calculate the PW, FW and AW for a BTCF MARR of 12%. Is the investment a good one if used this way? Why?
Aside from paying penalties what other reasons (at least 3), on why we need to be BIR compliant or remit 2550M?
You recently bought a mini-supercomputer for $10,000 to allow for tracking and analysis of real-time changes in stock and bond prices. Assume you plan on spending half your time tending to the stock market with this computer and the other half as personal use. Also assume you can depreciate your computer by 20% per year over 5 years (straight line rate). How much tax savings will you have in each of those 5 years, if any? Use a tax rate of 28%.
Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A 150,000 100,000 30,000 15,000 5 Basis, $ Gross Income (GI), $ Operating Expense (OE), $ Salvage Value, $ MARCS Recovery, Years The CFAT at the end of year 4 for Alt. A is less than $40,000. True False Alt.B 225,000 100,000 10,000 22,500 5
Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective income tax rate is 40%, answer the following true/false questions. Basis, $ CFBT, $ MACRS Recovery, Years Salvage Value, $ 20,000 Useful Life, Years 6 Alt. A 200,000 40,000 5 O True False Alt.B 300,000 50,000 5 The book value (BV) at the end of year 4 for Alt. A is greater than $35,000. 30,000 7
An investment in a new piece of equipment costing P 50,000 is expected to yield the following over its 5-year useful life: Revenues (cash), P 40,000; operating costs (cash), P 18,000; depreciation, P 10,000. The present value of P 1 received annually for 5 years and discounted at the cost of capital is 4.10 assuming that all cash flows occur at year-end. Ignoring tax effect, what is the benefit/cost ratio (profitability index) for this piece of equipment?
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