A mixer was purchased two years ago for $63346 and can be sold for $171667 today. The mixer has been depreciated using the MACRS 5-year recovery period and the firm pays 40 percent taxes on both ordinary income and capital gain. Find the after tax proceed

Q: Find the disposal tax effect for the asset if sold after 5 years for the following

A: (All amount is in $)YearOpening Book ValuePurchaseDepreciationAccumulated DepreciationClosing Book…

Q: The Brendan Excavation Company replaced an old machine 11 years ago with a new one. They sold the…

A: Annual depreciation tax shield Annual depreciation tax shield is the annual depreciation times the…

Q: A firm purchased $120,000 worth of light general-purpose trucks. The operations of the trucks lead…

A: The internal rate of return, or IRR, can be used to determine the return on investment of an…

Q: 14) Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally…

A: Depreciation can be defined as decrease in the book value of an asset each year.

Q: what's the after-tax salvage value of the equipment, in millions of dollars?

A: Value of Equipment after-tax is the net of sale value and cost excluding tax charges on any gain.…

Q: Custom Cars purchased $39,000 of fixed assets two years ago that are classified as 5-year MACRS…

A: Initial price= $39000Depreciation in year 1= 20%Depreciation in year 2= 32%Selling price in 2 years…

Q: 0 0 $589,811 $612,784 $635,811

A:

Q: The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece…

A: Book value of the asset refers to the value of asset after depreciation for the year.

Q: Your company has purchased equipment (for $50.000) that will reduce materials and labor costs by…

A: Breakeven period The breakeven period for any investment is the period required to make the initial…

Q: A piece of equipment was purchased for $1, 200 and depreciated on a straight-line basis to $140 over…

A: Under the straight-line method of depreciation, the fixed asset is depreciated with an equal amount…

Q: A manufacturing company just bought a new piece of equipment for $1.6 million. It is a class 8 asset…

A: after-tax annual interest rate = 12% corporate tax rate = 32% service life = 10 years historic…

Q: Southern inc. purchases an asset for 98,000. Thus asset qualifies as a 3 year recovery asset under…

A: Cost of the asset = $98,000The book value of the asset at the end of 2 years is

Q: St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a…

A: PV is the Capital Budgeting technique used to evaluate the profitability and feasibility of the…

Q: Macaron Corporation is making a $96,400 investment in equipment with a 5-year life. The company uses…

A: Lets understand the basics. Depreciation is a reduction in value of asset due to wear and tear…

Q: A machine is purchased for $500,000 and is used through the end of Year 2. The machine falls under…

A: A tax deduction refers to an eligible expense or cost that can be subtracted from your taxable…

Q: A corporation purchased a machine for $60,000 four years ago. It had an estimated life of 10 years…

A: Business organizations are required to charge depreciation expenses on their assets. The book value…

Q: David's company is considering the acquisition of machine which belongs to a class with CCA rate of…

A: A person or company may decrease the amount of income that is subject to taxation by using a tax…

Q: A firm invests $10.70 million in a new stamping machine. It depreciates straight-line for tax…

A: It is a problem that requires the calculation of the present value of tax savings due to…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Salvage value refers to the residual value, that is, the value at which the equipment can be traded…

Q: Consider a profitable company with an asset that cost $3 million that is depreciated straight line…

A: The net proceeds collected after deducting the tax from the overall proceeds are referred to as the…

Q: Scallop Corporation purchased oil exploration equipment for $600,000 that will be depreciated over…

A: After-tax rate of return can be defined as the financial benefit towards the invested funds after…

Q: Three years ago, your firm bought a new machine for $3,000. The machine was depreciated on a…

A: Remaininglife=6years−3years=3YearsBookvalue=(Purchaseprice)∗Remaininglife/Totallife.=($3,000)∗3/6.=$…

Q: An asset purchased today at a cost of $50,000 is depreciated straight-line down to value 0 over a…

A: First we need to calculate book value of an asset after 2 years.Book value = Cost of asset - Total…

Q: Wearout Corporation has a shoelace machine with an original cost of $100,000. Depreciation expense…

A: Cost of machine = $100,000 Annual depreciation rate = 10% Tax rate = 21%

Q: The New Town store bought some display shelves 5 years ago for $60,000. They have been depreciating…

A: Calculation of NCF (net cash flow) is shown below: Hence, option B is correct. Formula table for…

Q: TXY Inc, recently purchased a new delivery truck. The new truck cost $25,000., and it is expected to…

A: Net present value = Present value of cash in flows - present value of cash outflowsif the truck not…

Q: Talia’s Tutus bought a new sewing machine for $50,000 that will be depreciated over 5 years using…

A: Cost of machine= $50000 Useful life = 5 Years Rate of depreciation = 20% Year Adjusted Balance…

Q: The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece…

A: The projected residual worth of an asset at the end of its useful life is referred to as salvage…

Q: Acorporation purchased a machine for $60,000 five years ago. It had an estimated life of 10 years…

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: An asset that was originally purchased for $60,818 is being depreciated straight-line over its…

A: Cost = $  60818 Depreciated value = 83% Book value at the time of sale = Cost*(1-Depreciated value)…

Q: Suppose Hampton Corporation sells land for $8,000,000. Hampton paid $5,000,000 for the land several…

A: After-tax cash flow is the amount that is arrived after net of taxes paid on the receipt of any…

Q: Based on this information the payback period is:

A: Annual cash flow=Depreciation+Net income =(10000+5000)=$15000