Flag A mining corporation purchased $120,000 of production machinery and depreciated is using SOYD depreciation, a 5 year depreciable life, and zero salvage value. The corporation is a profitable one that has a 22.98% combined incremental tax rate. At the end of 5 years the mining company changed its method of operation and sold the production machinery for $40,000. During the 5 years the machinery was used, it reduced mine operating costs by $32,000 a year, before taxes.lf the company MARR is 12% after taxes, was the investment in the machinery a satisfactory one?

Flag A mining corporation purchased $120,000 of production machinery and depreciated is using SOYD depreciation, a 5 year depreciable life, and zero salvage value. The corporation is a profitable one that has a 22.98% combined incremental tax rate. At the end of 5 years the mining company changed its method of operation and sold the production machinery for $40,000. During the 5 years the machinery was used, it reduced mine operating costs by $32,000 a year, before taxes.lf the company MARR is 12% after taxes, was the investment in the machinery a satisfactory one?

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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Mario Ltd purchased a machine for GHS 50,000 on 1 January 20X1. The machine was judged to have a five-year life with a residual value of GHS 5,000. During 20X3, the market for the product declined and the machine was sold on 1 January 20X4 for GHS 7,000. According to IAS 16 Property, Plant and Equipment, what was the loss on disposal? A. GHS 27,000 B. GHS 13,000 C. GHS 16,000 D. GHS 23,000
Montana Mining Company pays $4,771,370 for an ore deposit containing 1,502,000 tons. The company installs machinery in the mine costing $214,200. Both the ore and machinery will have no salvage value after the ore is completely mined. Montana mines and sells 150,100 tons of ore during the year. Prepare the December 31 year-end entries to record both the ore deposit depletion and the mining machinery depreciation. Mining machinery depreciation should be in proportion to the mine's depletion. Note: Do not round intermediate calculations. Round your final answers to the nearest whole number. View transaction list Journal entry worksheet Credit View general Journal
A division of Raytheon owns a 5-year-old turret lathe used to manufacture fabricated metal products that was purchased for $96,000 and now has a financial reporting (non-tax) book value of $24,000. It has been depreciated for tax purposes as MACRS-GDS 7-year property. It has a current market value of $18,000. The expected decline in market value is $3,000 per year from this point forward to a minimum of $3,000. O&M costs are $8,000 per year. Additional capability is needed. If the old lathe is kept, that new capability will be contracted out for $13,000, assumed payable at the end of each year. A new turret lathe has the increased capability to fulfill all needs, replacing the existing turret lathe and requiring no outside contracting. It can be purchased for $65,000 and will have an expected life of 8 years. Its market value is expected to be $65,000(0.7t)at the end of year t. Annual O&M costs are expected to equal $10,000. If the after-tax MARR is 9 percent, the tax rate is…
4
1.
XYZ Company purchases a new machine for $50,000 with a useful life of 5 years and no salvage value. The company uses straight-line depreciation. Calculate the annual depreciation expense for the machine.
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Max Corporation purchased a machine for $80,000 and depreciated it straight-line to zero over its 8-year life. After six years, Max sold the machine for $38,000. If Max has a 21% tax rate, what is the cash flow associated with the sale of the machine? $41,780 $20,000 $35,900 $34,220 $38,000
During its inception, Devon Company purchased land for $250,000 and a building for $200,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, Regan Company, in exchange for 20,000 shares of Regan's $10 par value stock. Devon uses straight-line depreciation. Useful life for the building is 20 years, with zero residual value. An appraisal revealed that the building has a fair value of $250,000. What will Devon record as Additional Paid in Capital as a result of this transaction? Group of answer choices additional paid-in capital of $0. additional paid-in capital of $270,000. additional paid-in capital of $350,000. additional paid-in capital of $300,000.
Nuts-R-Us, Inc. purchased nut-shelling equipment at a total cost of $80,000. The equipment was depreciated by using MACRS with a recovery class of 3 years and an anticipated end-of-useful-life value of $8000. The company has decided the equipment is no longer needed after two years and wishes to determine the minimum value it can accept for the equipment (that is, the lowest value that will result in no loss on the sale). Find the minimum selling price for the equipment.
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Sheridan Corp is a publicly traded company that has just purchased a new piece of equipment for its production process. The equipment costs $54000 with a $8800 residual value, an estimated useful life of 8 years and an expected life of 10 years with a $4000 salvage value. Assuming that Sheridan has a December 31 year end and the equipment was purchased on January 1, how much depreciation expense should the company record at the end of year one? The company uses the straight-line method.Questi Multiple CQuestioMultiple Ch $4520 $5085 $5 650 $5400

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