An electrical appliance company purchased an industrial robot costing $300,000 in year 0. The industrial robot to be used for welding operations is depreciated at a 30% declining balance rate for tax purposes. If the robot is to be sold after 5 years, com- pute the amounts of gains (losses) and the disposal tax effect for the following three salvage values with a corporate tax rate of 34%. (a) $10,000 (c) $200,000 (b) $125,460

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
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An electrical appliance company purchased
an industrial robot costing $300,000 in
year 0. The industrial robot to be used for
welding operations is depreciated at a 30%
declining balance rate for tax purposes. If
the robot is to be sold after 5 years, com-
pute the amounts of gains (losses) and
the disposal tax effect for the following
three salvage values with a corporate tax
rate of 34%.
(a) $10,000
(c) $200,000
(b) $125,460
Transcribed Image Text:An electrical appliance company purchased an industrial robot costing $300,000 in year 0. The industrial robot to be used for welding operations is depreciated at a 30% declining balance rate for tax purposes. If the robot is to be sold after 5 years, com- pute the amounts of gains (losses) and the disposal tax effect for the following three salvage values with a corporate tax rate of 34%. (a) $10,000 (c) $200,000 (b) $125,460
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