Initial equipment cost=$100,000 Market value at the end of 6 years = $6,000 Use MACRS depreciation. The team is a "3 year property". Combined incremental tax rate is 25%. Año 0 1 2 3 4 5 6 BTCF*($) -100K 40K 40K 45K 30K 5K 5K
Initial equipment cost=$100,000 Market value at the end of 6 years = $6,000 Use MACRS depreciation. The team is a "3 year property". Combined incremental tax rate is 25%. Año 0 1 2 3 4 5 6 BTCF*($) -100K 40K 40K 45K 30K 5K 5K
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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Initial equipment cost=$100,000
Market value at the end of 6 years = $6,000
Use MACRS
Combined incremental tax rate is 25%.
Año 0 1 2 3 4 5 6
BTCF*($) -100K 40K 40K 45K 30K 5K 5K
*Before tax cash flow
Fill the whites:
(a)The taxable income at the end of the first year is $(Answer)
b) The tax payable in the first year is $(Answer)
c) The after-tax cash flow (ATCF) for year 1 is $(answer)
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