Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%. Churchill has a tax rate of 30%. If the asset is sold at the end of four years for $40,000, what is the cash flow from disposal?

Q: Keating Co. is considering disposing of equipment that cost $62,000 and has $43,400 of accumulated…

A: Capital budgeting is a critical financial management process used by businesses to evaluate and make…

Q: capitalized cost of the commodity and the equivalent uniform annual cost.

A: Capitalized cost can be defined as the present value of cashflows which continue for an infinite…

Q: The Electric Company buys machinery for $500,000 and gives a promissory note to pay dated 2 years…

A: A promissory note is a written promise or a financial instrument that outlines a borrower's…

Q: Keating Co. is considering disposing of equipment with a cost of $74,000 and accumulated…

A: Preparation of income statement helps the business entity in determining how much amount of gross…

Q: Custom Cars purchased $39,000 of fixed assets two years ago that are classified as 5-year MACRS…

A: Initial price= $39000Depreciation in year 1= 20%Depreciation in year 2= 32%Selling price in 2 years…

Q: Keating Co. is considering disposing of equipment that cost $50,000 and has $40,000 of accumulated…

A: Sell or lease is the decision making analysis which helps the entity to make a decision relating to…

Q: The market value of a presently owned machine in a wind turbine manufacturing plant is $130,000. It…

A:

Q: ABC Inc. purchased machinery for $600861 which is used through the end of Year 2. The machine falls…

A: CCA Tax Shields = Depreciation * Tax rate for each years - Tax shield on sale value   Year 1 (600861…

Q: Want Correct answer for this question so please provide it

A: Step 1: ABCDEF1Year012342MARCRS  Rate 0.33330.44450.14810.07413Purchase Price…

Q: Tony Industries plan to sell a machine in the current tax year. The cost basis presented is…

A: There is gain on the sale of assets if the sale price exceeds the book value.

Q: In year 0, an electrical appliance company purchased an industrial robot costing $350,000. The robot…

A: MACRS: Modified Accelerated Cost Recovery SystemThe modified accelerated cost recovery system is a…

Q: ABC, Inc. purchased an equipment at time=0 for $135,077. The shipping and installation costs were…

A: Calculation of Cash Flow in Year 4:The cash flow in year 4 is $123,123.96.Excel Spreadsheet:

Q: A. Company Y must choose between purchasing a building for OMR 861,000 or leasing the building for…

A: Present value of cost Purchase = Building price - Present value of tax benefit on depreciation

Q: EFG Company has an opportunity to invest in a new project. The project requires a $240,000…

A: The net present value method is an important tool for the evaluation of the projects. It refers to…

Q: A corporation acquires specialized machinery for $200,000 with a useful life of 9 years. The…

A: The after-tax cash flow is computed by adding the depreciation expense to the net income after…

Q: Burrell Company purchased a machine for $10,000 on January 2, 2019. The machine has an estimated…

A: DEPRECIATION UNDER DOUBLE DECLINING METHOD Rate =100%5 =20% Double declining rate = 20×2=40%

Q: 4) A steam turbine was purchased five years ago at a price of P 2, 750, 000 including tax.…

A: Depreciation is the reduction in the value of an asset due to the normal usage in business.…

Q: An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an…

A: After tax salvage value is the amount after tax that is received at the end of project and end of…

Q: The ABC Company uses the after-tax MARR of 10% per year, and effective tax ra machine has the…

A: Depreciation as per SLM = (Initial cost - Salvage Value)/life Present Value of CFAT i.e. cash flows…

Q: Troy Industries purchased a new machine 3 year(s) ago for $80,000. It is being depreciated under…

A: MACRS depreciation schedule specifies the specific depreciation rates. This accumulated depreciation…

Q: Keating Co. is considering disposing of equipment that cost $56,000 and has $39,200 of accumulated…

A: Differential analysis :— This analysis shows the comparison between two alternatives.  Net benefit…

Q: A company has purchased a machine (CCA rate 22%) at $223,000 and has a tax rate of 33.00%. By how…

A: Net Present Value (NPV) is a financial measure used to analyze the profitability of an investment or…

Q: Why is this an operating lease for Child Company? What are the amounts of the right-of-use asset and…

A: Lease liability is the liability which is required to be paid by the lessee to the lessor and which…

Q: Duncan Company owns a machine with a cost of $75,000 and accumulated depreciation of $15,000 that…

A:

Q: Genetic Insights Co. purchases an asset for $10,473. This asset qualifies as a seven-year recovery…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: Aeetal company has acquired a new heavy duty crane for $300.000 The company calculates depreciation…

A: Depreciation is a non-cash expense which is incurred due to a continuous use of fixed asset.…

Q: Nozark Corp. is now in the final year of a project.  The equipment originally cost $9,179, and the…

A: Book value =$736 Sale price of equipment =$2448 Tax rate =30%

Q: Prepare a differential analysis on February 21 as to whether Duncan Company should lease…

A: Incremental Analysis: Incremental analysis refers to the analysis of differential revenue that could…

Q: KLM Company has the opportunity to purchase an asset that costs $50,000. The asset is expected to…

A: The term "payback period" refers to the number of years that must pass before the initial monetary…

Q: Md inc. acquires a machine for 77,000. It spends an additional $10,000 in installing the machine and…

A: Solution:

Q: (a) Declining balance method, (b) DDB method, (c) sinking fund method g iven interest rate at 12.5…

A: Since this is multi- part question, we are going to solve only first three parts for you. To get the…

Q: $1,000 in exp e depreciatie

A: Part A Initial Cost of Equipment +Overhead= $20000 Initial cost of equipment after tax= $25600…

Q: A company purchases an asset that costs $30,000. This asset qualifies as 3-year property under MACRS…

A: Tax Saving on Depreciation: The quantity of profits that are used to calculate taxes is decreased…

Q: A company buys a solar panel unit for P105,000. The shipping and installation fees amount to…

A: There are different methods of depreciation. That method of depreciation which is most suited should…

Q: Keating Co. is considering disposing of equipment with a cost of $62,000 and accumulated…

A: Lease accounting is a financial reporting process where a company records and discloses the…

Q: Based on this information the payback period is:

A: Annual cash flow=Depreciation+Net income =(10000+5000)=$15000

Q: A firm purchased $62,800 of fixed assets two years ago. The company no longer needs these assets so…

A: Net cash flow from sales is the amount of cash generated or consumed from the sale of goods or…