A small print shop is investing in new printing equipment that will cost $30,000. They estimate that they will gain of $12,000 per year in additional revenues for each of the next 6 years. At the end of 6 years, the equipment will have a salvage value of $3,500. Assuming a tax rate of 22%, a MACRS 5-year property class, 50% bonus depreciation, and an after-tax MARR of 10%, compute the present worth of the printing equipment and determine whether or not the print shop should invest in it. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. %24

A small print shop is investing in new printing equipment that will cost $30,000. They estimate that they will gain of $12,000 per year in additional revenues for each of the next 6 years. At the end of 6 years, the equipment will have a salvage value of $3,500. Assuming a tax rate of 22%, a MACRS 5-year property class, 50% bonus depreciation, and an after-tax MARR of 10%, compute the present worth of the printing equipment and determine whether or not the print shop should invest in it. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. %24

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

3 A business needs to purchase packaging equipment that will provide revenue of $120,000 per year for 10 years; operating costs are $40,000 per year for 10 years. The equipment costs $220,000, has an estimated useful life of 10 years, and has a salvage value of $20,000 at the end of that period. It is depreciated using the sum-of-the-years-digits method. The company pays income tax at a rate of 30%, VAT of 16% and MARR of 10%. To acquire the equipment, a loan of $70,000 is requested at a rate of 12.5% annual interest, which must be repaid in six years through equal fixed payments (Rents) each year-end, the first one a year after the purchase. Determine the NPV, IRR, EAC, COST/BENNEFIT. *Please show procedure in Excel*
The Shell Corp. owns a piece of petroleum drilling equipment that costs $200,000 and will be depreciated by DDB depreciation with B=$200,000, N=10 years, S=$0. There is a combined 50% tax rate. Shell will lease the equipment to others each year and receive $80,000 per year. At the end of 3years, the firm will sell the equipment for $100,000. If the firm requires a 10% after-tax rate of return, what is the PW of the investment?
complete solution, thank you
The depreciation schedule for certain equipment has been arrived at by various methods. The estimated salvage value of the equipment at the end of its 7 year useful life is $700. Identify the resulting depreciation schedules. Year I II III IV 1 $1,329 $2,325 $2,857 $3,161 2 $1,329 $1,993 $2,041 $2,162 3 $1,329 $1,661 $1,458 $1,478 4 $1,329 $1,329 $1,041 $1,011 5 $1,329 $ 996 $ 744 $ 692 6 $1,329 $ 664 $ 531 $ 473 7 $1,329 $ 332 S 379 $ 323 Which scheme represents DB depreciation? Select one: II III IV I
A machine has a 1st cost of P 140,000 and a life of 8 years with a salvage value of P10,000 at the end of its useful life. Using double declining balance method a. What is the Book Value on the 3rd year? b. What is the depreciation charge in the 4th year?
1
Please answer fast please arjent help please
Prepare a depreciation table for an asset bought at P150,000 and estimated to be useful for a period of 7 years. Estimated salvage value is 10% of its original cost. Year Beginning Book Value Depreciation Book Value 1 150,000 2
Updated class practice problem to include state tax and proper consideration of asset disposal (1/2 depreciation and need BV to determine recapture or loss) GIVENS: Initial Cost $150,000 Annual net saving $50,000 state Useful life 6 years federal 6.50% 21.0% Salvage value $30,000 tax rate BTCF-D TI tax rate BTCF-Income Tax Year Taxable BTCF MACRS Depreciation Income Income Tax ATCF 0 ($150,000) ($150,000) 1 50,000 20% ($30,000) $20,000 $4,618 45,382 2 50,000 32% ($48,000) $2,000 $462 49,538 3 50,000 19.20% ($28,800) $21,200 $4,895 45,105 4 50,000 11.52% ($17,280) $32,720 $7,555 42,445 5 50,000 11.52% ($17,280) $32,720 $7,555 42,445 6 50,000 2.88% ($4,320) $45,680 $10,548 63,523 indudes 6 and disposal disposal 30,000 BV= $4,320 $25,680 $5,930 recapture ROR Question 1 What is the ATCF ROR when state taxes and asset disposal are properly considered?
Daily Enterprises is purchasing a $10.2 million machine. It will cost $51,000 to transport and install the machine. The machine has a depreciable life of 5 years and will have no salvage value. The machine will generate incremental revenues of $3.8 million per year along with incremental costs of $1.1 million per year. If Daily's marginal tax rate is 21%, what are the incremental earnings (net income) associated with the new machine? The annual incremental earnings are $ (Round to the nearest dollar.)
All subpart in 1 question
Updated class practice problem to include state tax and proper consideration of asset disposal (1/2 depreciation and need BV to determine recapture or loss) GIVENS: Initial Cost $150,000 Annual net saving $50,000 state Useful life Salvage value $30,000 6 years federal 6.50% 21.0% tax rate -BTCF-D TI tax rate BTCF-Income Tax Year Taxable Income BTCF MACRS Depreciation ATCF Income Tax 0 ($150,000) ($150,000) 1 50,000 20% ($30,000) $20,000 $4,618 45,382 2 50,000 32% ($48,000) $2,000 $462 49,538 3456 50,000 19.20% ($28,800) $21,200 $4,895 45,105 4 50,000 11.52% ($17,280) $32,720 $7,555 42,445 50,000 11.52% ($17,280) $32,720 $7,555 42,445 50,000 2.88% disposal 30,000 BV= ($4,320) $4,320 $45,680 $25,680 $5,930 $10,548 63,523 includes 6 and disposal recapture ROR Question 1 What is the ATCF ROR when state taxes and asset disposal are properly considered?