Chapter 7 ATCF1A company has and effective income Tax Rate of 38%. The company must choose one of the following exclusive disinfection equipmets. The after tax MARR is 6% peryear. Which altermatives should be selected using : INCREMENTAL ANALYSIS -ATCF-using PWtax= 38%MARR=6%Alternative12.0003.0002000Altemative30,000Captal investmentAnnual Net RavenuesSalvage ValueUseful Me9.0003.000MACRS-SL-ADS 3MACRS-GDS 3Depreciation Mathedrecovery periodrecovery periodNote: MACRS-GDS 3 recovery periods rates are.3333444513.1481.0741

The MACRS ADS Straight Line 3 Recovery period rates are as follows: Source:…

Chapter 7 ATCF LA company has and effective income Tax Rate of 38%. The company must choose one of the following exclusive disinfection equipments The after tax MARR is 6% per year. Which alternatives should be selected using : INCREMENTAL ANALYSIS -ATCF-using PW tax= 38% MARR= Aernative 12.000 3.000 2000 Atermative 30.000 Capital investment Annual Net Ravenues Salvage Valus Usetul Me 9.000 3.000 MACRS-SL-ADS3 recovery period MACRS-GOS 3 recovery peried Depreciation Mathed Note: MACRS605 3 ecovery periods ratesare 3333 4445 1481 0741

Chapter 7 ATCF LA company has and effective income Tax Rate of 38%. The company must choose one of the following exclusive disinfection equipments The after tax MARR is 6% per year. Which alternatives should be selected using : INCREMENTAL ANALYSIS -ATCF-using PW tax= 38% MARR= Aernative 12.000 3.000 2000 Atermative 30.000 Capital investment Annual Net Ravenues Salvage Valus Usetul Me 9.000 3.000 MACRS-SL-ADS3 recovery period MACRS-GOS 3 recovery peried Depreciation Mathed Note: MACRS605 3 ecovery periods ratesare 3333 4445 1481 0741

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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Net Salvage Value Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $14.4 million, of which 85% has been depreciated. The used equipment can be sold today for $4.8 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. $
Suppose that the marginal tax rate is 15%. If a farmer decides to purchase a combine it will increase his revenue by $6,000 per year, but it will also increase his expenses by $1,000 per year. The before tax rate on this investment is 25%. The life of this investment is 6 years. What is the present value of the after tax net return? $14,133 $12,544 $16,084 $13,706 None of the answers are correct
Spherncal Manufacturing reoenty spent $14 milion to purchase some equipment used in the manufacture of dsk drives. This equipment has a CCA rate of 20% and Bphericals marginal corporate tax rate in 35% a. What are he annual CCA deductions associated with this equipment for the fiest five years? b. What are the annual CCA tax shields for the first five years? e. What is the present value of the first five CCA tax shields if the appropriate discount rate is 12% per year? d. What is the prosent value of alt the CCA tax shieids assuming the equiment is never sold and the appropriate discount rate is 12% per yea? e. How might your answer to part (d) change if Spherical anticipates that ts marginal corporate tax rate will increase substantialy over the next five years? a. What are the annual CCA deductions associated with this equipment for the first five years? The CCA deduction for year 1 is S (Round to the nearest dolar.)
Give typing answer with explanation and conclusion
NOT GRADED Net Present Value AnalysisChampion Company is considering a contract that would require an expansion of its food processing capabilities. The contract covers five years. To provide the required products, Champion would have to purchase additional equipment for $80,000. Champion estimates the contract will provide annual net cash inflows (before taxes) of $35,000. For tax purposes, the equipment will be depreciated as follows: Year 1 $10,000 Year 2 20,000 Year 3 20,000 Year 4 20,000 Year 5 10,000 Although salvage value is ignored in the tax depreciation calculations, Champion estimates the equipment will be sold for $10,000 after five years. Assuming a 35% income tax rate and a 10% hurdle rate, compute the net present value of this contract proposal. Using net present value analysis, should Champion accept the contract? Round answers to the nearest whole number. Use rounded answers for subsequent calculations.Use a negative sign with net present value to…
dont give answer in image format
6. A machine could be purchased for £800,000; it would be used for 3 years and then sold for £580,000. It would qualify for capital allowances at 18% reducing balance basis with a balancing allowance or charge on disposal. The company pays tax at 20% and has a cost of capital of 10%. What is the present value of the tax cashflow at time 1, to the nearest £100? A £14,700 B £26,200 C £28,800 D £144,000
ss
ingremng ly obede D T ta V ign Home Tooly Engineering foone Sign In Profit = 1,365,827-980,000 = 385,827 IQD ((This machine should be purchased, as it is considered to be profitable)) H.W 1- Find the internal rate using the method of Internal Rate of Return (IRR) if 1= 15%, for the table shown below. If the initial cost is (220,000 U) 350 380 400 0 0 500 1000 770 450 500 550 470 Cost (U) Revenue 780 650 690 450 880 660 890 770 (U) Year 1 2 3 4 5 6 8 10 0 AM 油
A company has purchased a machine (CCA rate 24%) at $300,000 and has a tax rate of 33.00%. By how much will the NPV change if the company is able to obtain a $13,000 salvage value for its machine at the end of the project's life in Year 4? Assume a discount rate of 11.20% and that all else remains the same. Question 10Answer a. $8,502 b. $10,415 c. -$1,913 d. $6,589 e. $10,075
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