Current Attempt in Progress Consider an asset that was separated into its main components A, B and C). The $1242000 purchase price was allocated to these components in equal proportions. The useful lives are 12, 4, and 7 years for components A, B, and C respectively. Components A and B are not expected to have any residual value, but Component C is expected to have a residual value of $18600. Assuming straight-line depreciation, total annual depreciation expense. to the nearest dollar relating to these assets is O $130071. O $103500 O $194486 O $197143.

Part a) Use a 10% MARR to determine the economic service life (ESL) of a defender asset (and the corresponding annual worth (AW) value) with the following characteristics: First cost = $70,000 Estimated annual operating cost (AOC) = $20,000 per year Maximum remaining useful life = 4 years Salvage value = $10,000 anytime it is replaced Part b) Determine the ESL and corresponding AW of the asset using more precise estimates as follows: AOC will be $20,000 in the first year and then increase by 15% per year Maximum remaining useful life = 8 years Salvage value will be $10,000 at EOY 1 and then decrease by $1,000 per year

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An asset with a purchase price of $486,966 falls in the 5-year MACRS asset class. The asset will be sold at the end of a three year project for $153,883. What is the book value of the asset at the end of the project? Round your answer to the nearest dollar. Year Depreciable Allowance 1 20% 32 19 12 11 6. 6. 4-

The amount of the average investment for a proposed investment of $147,000 in a fixed asset with a useful life of 4 years, straight-line depreciation, no residual value, and an expected total net income of $30,400 for the 4 years is Oa. S7,600 Ob. S30,400 Oc. $36,750 Od, S73,500

Assume a situation in which a company has an existing asset, A, that has a current net book value (original cost less accumulated depreciation to date) of $300,000. This asset has a useful life of 3 additional years. Its estimated disposal (sales) value both today and at the end of 3 years is zero. Asset B, which would replace A, could be purchased today for $600,000. If purchased, B would generate annual (cash) operating cost savings (pretax) of $280,000 for each year of its 3-year useful life. In determining depreciation deductions for tax purposes, assume the straight-line method and zero salvage value for both assets. The company is subject to a combined (federal, state, and local) income tax of 40%, both for operating income and gains/losses related to the sale of assets. Other than the initial outlay for asset B, assume that all cash flows (and related tax payments) occur at the end of the year. Assume a weighted- average cost of capital of 10%. (Use Table 1 and Table 2.) (Do not…

Assume a situation in which a company has an existing asset, A, that has a current net book value (original cost less accumulated depreciation to date) of $300,000. This asset has a useful life of 3 additional years. Its estimated disposal (sales) value both today and at the end of 3 years is zero. Asset B, which would replace A, could be purchased today for $600,000. If purchased, B would generate annual (cash) operating cost savings (pretax) of $280,000 for each year of its 3-year useful life. In determining depreciation deductions for tax purposes, assume the straight-line method and zero salvage value for both assets. The company is subject to a combined (federal, state, and local) income tax of 40%, both for operating income and gains/losses related to the sale of assets. Other than the initial outlay for asset B, assume that all cash flows (and related tax payments) occur at the end of the year. Assume a weighted-average cost of capital of 10%. (Use Table 1  and Table 2.) (Do not…

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An asset will cost $1750 when purchased this year. It is further expected to have a salvage value of $250 at the end of its 5-year depreciable life. Calculate complete depreciation schedules giving the depreciation charge, D(n), and end-of-year book value, B(n), for straight-line (SL), double declining balance (DDB), 100% bonus depreciation, and modified accelerated cost recovery (MACRS) depreciation methods. Assume a MACRS recovery period of 5 years.

Given the following information and assuming straight-line depreciation to zero, what is the IRR of this project? Initial investment = $400,000; life = four years; cost savings = $125,000 per year; salvage value = $20,000 in year 5; tax rate = 34%; discount rate = 12%.Multiple Choice7.51%9.43%10.24%6.25%8.15%