A piece of newly purchased industrial equipment costs $1,030,000 and is classified as seven-year property under MACRS (MACRS Schedule). Calculate the annual depreciation allowances and end-of-the-year book values for this equipment.

A piece of newly purchased industrial equipment costs $1,030,000 and is classified as seven-year property under MACRS (MACRS Schedule). Calculate the annual depreciation allowances and end-of-the-year book values for this equipment.

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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A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is purchased in December by a calendar-year taxpayer for $22,000. The instrument will be used for 6 years and be worth $2,000 at that time. a. Calculate the depreciation deduction for years 1, 3, and 6. b. If the instrument is sold in year 4, determine the depreciation deduction for years 1, 3, and 4.
A project requires $428,000 of equipment that is classified as seven-year property. What is the depreciation expense in Year 3 giverz the following MACRS depreciation allowances, starting with Year 1: 14 29 24 49 1749, 12.49, 8.93, 8.92, 8.93, and 4.46 percent? Multiple Choice O $48.447.30 O $89,038.42 $56,03815
A general-purpose truck is purchased for $36,000. It is a MACRS-GDS 5-year property and qualifies for 100% bonus depreciation and is expected to last for 8 years. What is the depreciation and book value at the end of year 3? a. $0 and $0 b. $6,912 and $10,368 c. $21,456 and $14,544 d. $21,456 and $0.
A company purchased $206,000 of fixed assets that are classified as five-year MACRS property. The MACRS rates are 2, 32, 192, 1152 1152, and .0576 for Years 1 to 6, respectively. What will the accumulated depreciation be at the end of Year 4 if the tax rate is 24 percent and no bonus depreciation is taken? Instruction: Enter your response rounded to two decimal places.
On January 1, 2024, Logan Services purchased a used airplane for $50,600,000. Logan Services expects the plane to remain useful for five years (5,000,000 miles) and to have a residual value of $5,600,000. The company expects the plane to be flown 1,200,000 miles during the first year. Read the reguirements. Requirement 1a. Compute Logan Services's first-year depreciation expense on the plane using the straight-line method. Begin by selecting the formula to calculate the company's first-year depreciation expense on the plane using the straight-line method. Then enter the amounts and calculate the depreciation for the first year. = Straight-line depreciation Requirement 1b. Compute Logan Services's first-year depreciation expense on the plane using the units-of-production method. Before calculating the first-year depreciation expense on the plane using the units-of-production method, calculate the depreciation expense per unit. Select the formula, then enter the amounts and calculate the…
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ASAP please, direct thumps up :)
On Jan. 1, 2021, Mother, Inc., whose financial year end is every Dec. 31, purchased a unit of equipment at a total cost of P10,000,000. The equipment is estimated to have a useful life of 5 years with a residual value equal to 10% of its cost. - How much is the depreciation expense for 2021 using the straight line depreciation method? - How much is the depreciation expense for 2024 using the SYD depreciation method? - How much is the depreciation expense for 2025 using the double declining balance depreciation method?
A building was purchased for $68,000. The asset has an expected service life of eight years and depreciation expense each year is $5,000 using the straight-line method. What is the residual value of the building? Multiple Choice $0 $28,000 $8,500 $13,500
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Two investments involving a granary qualify for different property classes.Investment A costs $70,000 with $3,000 salvage value after 16 years and is depreciated as MACRS-GDS in the 10-year property class. Investment B costs $110,000 with a $4,000 salvage value after 16 years and is in the MACRS-GDS 5-year property class. Operation and maintenance for each is expected to be $18,000 and $14,000 per year, respectively. The income-tax rate is 25%, and MARR is 9% after taxes. a. Determine which alternative is less costly, based upon comparison of after-tax annual worth. b. What must the cost of the second (more expensive) investment be for there to be noeconomic advantage between the two?

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