KIn order to determine the after-tax EUAC of a factory equipment, the following analysis table was prepared. Based on the partial information on the table, and using an income tax rate of 21%, answer thefollowing questionYearBTCFDepreciationTaxable Income Income TaxesATCF0- $13,0001- $3,200$1,3002- $3,200$2,3403- $3,200$1,8723$4,550Calculate the income tax amount for year 2 (note that it is a tax credit, since the BTCF is a cost)OA. $491OB. $672OC. $1,163OD. $1,367

To calculate the income tax amount for year 2 given the information in the table, let's follow these…

Answered: K In order to determine the after-tax…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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! Required information Determine the amount of any depreciation recapture (DR), capital gain (CG), or capital loss (CL) generated by each event described below. Use the result to determine the income tax effect, if Te = 32.5%. A Modified Accelerated Cost Recovery System (MACRS)-depreciated asset with a 7-year recovery period was sold after 8 years at an amount equal to 15% of its first cost of $160,000. The amount of depreciation recapture (DR) generated is determined to be $ 24000 The amount of taxes generated is determined to be $ .
N7
A $150,000 asset has been depreciated with the straight-line method over an 8-year life. The estimated salvage value was $30,000. At the end of the fifth year, the asset was sold for $90,000. From a tax perspective, what is happening at the time of disposal and what is the dollar amount?
A project capitalized for P 2,850,000 invested in depreciable asset will earn a uniform annual revenue of P 1,650,000 for 10 years. The costs for operation and maintenance total P 725,000 a year, and taxes and insurance will cost 3% of the first cost each year. The company expects its capital to earn 14% before income taxes. *** Type the letter of the correct answer. Using ROR method 1. The depreciation cost is: a) P 546,383.59 2. The total annual cost is: a) P 957,883.59 3. The rate of return is: • Using AW method 5. The annual revenue is: a) 44.92% 4. Is this a desirable investment? a) NO b) YES a) P 1,750,000 6. The total annual cost is: a) P 1,755,883.59 7. Annual worth is: b) P 147,383.59 a) P 293,116.41 8. Would you recommend a) NO b) P 1,356,883.59 b) 38.85% b) P 3,240,000 b) P 1,543,606.94 b) - P 105,883.59 investing? b) YES c) P 285,000.00 c) P 1,144,606.94 c) 24.28% c) MAYBE c) P 2,429,600 c) P 1,356,883.59 c) P 155,500.00 c) MAYBE d) P 334,106.94 d) P 1,095,500.00 d) 22.46%…
A relatively small privately-owned gravel-mining company has the sales results summarized below. Determine the annual percentage depletion for the limestone mine in year 3. Assume the company's taxable income is $165,000 each year. Taxable income: $165,000 (2) Spot Sales Price, $/Ton Year a) $82,500 b) $40,372 c) $26,303 d) $16,841 (1) Sales, Tons 1 34300 2 50100 3 71900 9.82 10.5 11.23 Gross Income = (1) * (2) $ $ 7 $ 336,826 526,050 807,437
Updated class practice problem to include state tax and proper consideration of asset disposal (1/2 depreciation and need BV to determine recapture or loss) GIVENS: Initial Cost $150,000 Annual net saving $50,000 state Useful life Salvage value $30,000 6 years federal 6.50% 21.0% tax rate -BTCF-D TI tax rate BTCF-Income Tax Year Taxable Income BTCF MACRS Depreciation ATCF Income Tax 0 ($150,000) ($150,000) 1 50,000 20% ($30,000) $20,000 $4,618 45,382 2 50,000 32% ($48,000) $2,000 $462 49,538 3456 50,000 19.20% ($28,800) $21,200 $4,895 45,105 4 50,000 11.52% ($17,280) $32,720 $7,555 42,445 50,000 11.52% ($17,280) $32,720 $7,555 42,445 50,000 2.88% disposal 30,000 BV= ($4,320) $4,320 $45,680 $25,680 $5,930 $10,548 63,523 includes 6 and disposal recapture ROR Question 1 What is the ATCF ROR when state taxes and asset disposal are properly considered?
3. An investment of $180,000 with a salvage value of $30,000 in 10 years can reduce annual operating cost by $36,000. Use MACRS with depreciation life of 5 years and effective tax of 38% to calculate the present worth of ATCF. MARR= 10%
A relatively small privately owned coal-mining company has the sales results summarized below. Determine the annual percentage depletion for the coal mine. Assume the company’s taxable income is $150,000 each year. Year Sales, Tons Spot Sales Price, $/Ton 1 34,300 9.82 2 50,100 10 3 71,900 11.23 Year Gross Income, $ Depletion amount 50% of the taxable amount Allowed Depletion 1 2 3
If PSK Engineering had a CFAT of $750,000, charged depreciation of $400,000, and had a Te of 36%, what was PSK’s CFBT?
Please help
A mining corporation purchased $120,000 of production machinery and depreciated it using 40% bonus depreciation with the balance using 5-year MACRS depreciation, a 5-year depreciable life, and zero salvage value. The corporation is a profitable one that has a 22% 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. If the company MARR is 12% after taxes, was the investment in the machinery a satisfactory one?
A robotic company recorded the following the past year: revenues = $300,000; expenses = $50,000; depreciation = $70,000; effective income tax rate = 35%. What is the company’s ATCF that year?

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