Consider an asset that costs $601,119 and is depreciated straight-line to zero over its 10-year tax life. The asset is to be used in a 4-year project; at the end of the project, the asset can be sold for $184,314. If the relevant tax rate is 0.27, what is the aftertax cash flow from the sale of this asset?

Q: The Wet Corporation has an investment project that will reduce expenses by $30,000 per year for 3…

A: Depreciation year 1= Depreciation rate * Project cost= 0.3333 * 35,000= 11665.50

Q: What is the net after tax cash flow for year 4 if the applicable tax rate is 40%? a. $39,328 b.…

A: We are given the following income statement and cash flows of a project for years 1-5:Required:1.…

Q: a project will increase sales by $92,800 and cash expenses by $53,200. The project will cost $89,000…

A: Operating cash flow is an important concept. It considers depreciation as a provision to get tax…

Q: ANB has a project with $185211 in depreciation expense each year, no changes in net working capital…

A: NPV is the most used method of capital budgeting based on the time value of money and it must be…

Q: Consider an asset that costs $725,000 and is depreciated straight-line to zero over its 10-year tax…

A: After tax salvage value is that amount which is received by the investor from selling the assets at…

Q: The XYZ Company is considering a new project that will have an annual depreciation expense of $3.7…

A: Approach to solving the question: Step 1: Figure out the cost of depreciation.First, figure out how…

Q: This project will require an investment of $20,000 in new equipment. Under the new tax law, the…

A: Given information: Initial investment : $20,000 Tax rate : 25% WACC (cost of capital) : 11% Under…

Q: Suppose you sell a fixed asset for $111,000 when its book value is $131,000. If your company's…

A: Given information: Book Value = $131,000 Sale value =  $111,000  Tax rate = 40% or 0.40 Required:…

Q: Brummit Corporation, is evaluating a new 4 year project. The equipment necessary for the project…

A: The projected residual value of an asset at the end of its useful life is referred to as salvage…

Q: Temple Corp. is considering a new project whose data are shown below. The equipment that would be…

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Q: A company has purchased a machine (CCA rate 24%) at $221,000 and has a tax rate of 38.00%. By how…

A: NPV is a capital budgeting technique that uses the time value of money to determine the present…

Q: for this equipment. 6. Calculating Salvage Value Consider an asset that costs $635,000 and is…

A: Cost of assets = $635,000 Life = 8 Years Annual depreciation = 635000/8 = $79375 Life used = 5 Years…

Q: Dave's Demolitions Inc. is considering purchasing $697,400 of equipment for a four- year project.…

A: Salvage Value net of tax refers to the sale value of the he equipment or the project after the…

Q: Foley Systems is considering a new project whose data are shown below. Under the new tax law, the…

A: To find the NPVStep 1: Calculate the Operating Cash FlowOperating Cash Flow = Sales less Costs less…

Q: You have a depreciation expense of $478,000 and a tax rate of 35%. What is your depreciation tax…

A: The depreciation tax shield refers to the amount of money deducted from the taxable income of a…

Q: Suppose you sell a fixed asset for $126,000 when it's book value is $157,000. If your company's…

A: The computation of after tax cash flow is as follows:Hence, the after tax cash flow is $136850.

Q: Consider a profitable company with an asset that cost $3 million that is depreciated straight line…

A: The net proceeds collected after deducting the tax from the overall proceeds are referred to as the…

Q: The fixed assets of a 10-year project cost $600,000, which will be depreciated using 10-year…

A: Given the fixed assets of a 10-year project costing $600,000, which will be depreciated using the…

Q: Suppose you sell a fixed asset for $110,000 when its book value is $130,000. If your company's…

A: Loss on sale = Book value - Sale value of asset =(130000-110000) =$20000

Q: Consider an asset that costs $655,000 and is depreciated straight-line to zero over its 8- year tax…

A: Cost of an Asset=$655,000 Estimated tax life=8 years Life of Project=6 years The sale price of an…

Q: Suppose you sell a fixed asset for $90,000 when its book value is $95,000. If your company's…

A: Here, Sale value = $90,000 Book value = $95,000 Tax rate = 21% To Find: After-tax cash flow of this…

Q: Thomson Media is considering some new equipment whose data are shown below. The equipment has a…

A: Initial Investment = $70,000 Cost of capital (WACC) = 10% Tax Rate = 25%. 100% bonus depreciation…

Q: Ernie's Electrical is evaluating a project that will increase sales by $48,000 and costs by $16,000.…

A: Operating cash flow is an important metric that we use in capital budgeting. Operating cash flow is…

Q: our company, RMU Inc., is considering a new project whose data are shown below. Under the new tax…

A: Cash flow is the amount of cash that comes in (cash inflow) and that goes out (cash outflow) of a…

Q: Foley Systems is considering a new project whose data are shown below. Under the new tax law, the…

A: NPV is the difference between present value(pv) of all cash inflows and initial investment NPV =PV…

Q: Kansas Corporation is reviewing an investment proposal that has an initial cost of $54,000. An…

A: A. Calculate the project's payback periodAnswer: Cash Payback period   Year Cash inflow Cumulative…

Q: Consider an asset that costs $666,000 and is depreciated straight-line to zero over its nine-year…

A: Cashflow means inflow or outflow of the cash. Positive cashflows (inflows) increase the cash…

Q: Consider an asset that costs $1,280,170 and is depreciated straight-line to 83,206 over its 14-year…

A: Cost of asset = 1,280,170 residual value = 83206  estimated life = 14 year annual depreciation =…

Q: A firm depreciated its assets with regard to an investment to $0.00 book value by the end of the…

A: Here, Scrap Market Value = $1,200,000 Life of the project = 15 years Interest rate = 14% Tax rate =…

Q: homson Media is considering some new equipment whose data are shown below. The equipment has a…

A: NPV is net present value and can be found as the difference between the present value of cash flow…