An asset with a first cost of $13,000 is depreciated using the Modified Accelerated Cost recovery System (MACRS) over a 5-year period. The cash flow before taxes (CFBT) is estimated at $10,000 for the first 4 years and $5000 thereafter as long as the asset is retained. The effective tax rate is 33%, and the money is worth 11% per year. In present worth dollars, how much of the cash flow generated by the asset over its recovery period is lost to taxes? The present worth (PW) of CFBT is determined to be $ The present worth (PW) of CFAT is determined to be $ The difference between the two present worth (PW) values is determined to be $

An asset with a first cost of $13,000 is depreciated using the Modified Accelerated Cost recovery System (MACRS) over a 5-year period. The cash flow before taxes (CFBT) is estimated at $10,000 for the first 4 years and $5000 thereafter as long as the asset is retained. The effective tax rate is 33%, and the money is worth 11% per year. In present worth dollars, how much of the cash flow generated by the asset over its recovery period is lost to taxes? The present worth (PW) of CFBT is determined to be $ The present worth (PW) of CFAT is determined to be $ The difference between the two present worth (PW) values is determined to be $

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

How can we Determine the after-tax cash flows?
14 - A contractor will face negative cash flow in the construction project as shown below. This is due to the late payment of monthly progress payments by the employer and the fact that the cash guarantee is kept by the employer until the end of the project. The interest on the money that the contractor will borrow to meet this negative money flow will be 2% per month. If the debt was taken without interest, how much debt would be left when the contractor pays his debts as a result of the progress payment? January -85 000 p.b. (currency unit) February -120 000 p.b. March -45 000 p.b. April -90 000 p.b. May -63 000 p.b. June -15 000 p.b. July + 295 000 p.b. August + 210 000 p.b.A) 78 000B) 85 000C) 87 000D) 0E) 90 000
Suppose for some year the income of a small company is $110,000; the expenses are $65,000; the depreciation is $25,000; and the effective income tax rate = 40%. For this year, the ATCF is most nearly (a) −$8,900 (b) $4,700 (c) $13,200 (d) $29,700 (e) $37,000.
A machine has a cost of Php 13173.00. It has a salvage of Php 2072.00 and an economic life of 9 years. Given this information and using SYD, what is the book value BVg ? Answer round off to two decimal places Round your answer to 2 decimal places.
SM1
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%.
A European candy manufacturing plant manager must select a new irradiation system to ensure the safety of specific ingredients, while being economical. The two alternatives available have the following estimates: System A B First Cost, $ –110,000 –85,000 CFBT, $ per Year 60,000 20,000 Life, Years 3 5 The company is in the 35% tax bracket and assumes classical straight line depreciation for alternative comparisons performed at an after-tax minimum acceptable rate of return (MARR) of 6% per year. A salvage value of zero is used when depreciation is calculated; however, system B can be sold after 5 years for an estimated 18% of its first cost. System A has no anticipated salvage value. Determine which is more economical using an annual worth (AW) analysis worked by hand. The annual worth analysis for system A is determined to be $ . The annual worth analysis for system B is determined to be $ .
10
Find Gross Value Added at Factor Cost: 2000 (i) Units of output sold (ii) Price per unit of output () (iii) Depreciation (7) (iv) change in stock (7) (v) Intermediate costs () 20 2000 (-) 500 15,000 3,000 (vi) Subsidy (7)
Consider the following financial information for an engineer: Age: 25Status: Single, no childrenGross Income: $54,000 401k investment: $4000Residential status: RentingTotal eligible itemized deductions: $3000 for charitable donations What is the taxable income? (IF you need to use them, assume the standard deduction for single is $12000 and married is $24000).
A machine has a cost of Php 12218.00. It has a salvage of Php 2509.00 and an economic life of 9 years. Given this information and using SYD, what is the book value BV, ? Answer round off to two decimal places Round your answer to 2 decimal places.
H6