MACRS RATE Recovery year 3 years 5 years 7 years 10 years 20% 33% 1 14% 10% 45 32 25 18 15 19 18 14 12 12 12 12 5 7. 4 6 10 11 A corporation is evaluating the relevant cash flows for a capital budgeting decision and must estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $15.000. The machine has an original purchase price of $80,000, installation cost of 20,000, and will be depreciated under the five - year MACRS. Net working capital is expected to decine by $5.000. The firm has a 40 percent tax rate on ordinary income and long - term capital gain. The terminal cash flow is OA. $24.000 OB. $26.000 OC. $14,000 DD. S16.000

MACRS RATE Recovery year 3 years 5 years 7 years 10 years 20% 33% 1 14% 10% 45 32 25 18 15 19 18 14 12 12 12 12 5 7. 4 6 10 11 A corporation is evaluating the relevant cash flows for a capital budgeting decision and must estimate the terminal cash flow. The proposed machine will be disposed of at the end of its usable life of five years at an estimated sale price of $15.000. The machine has an original purchase price of $80,000, installation cost of 20,000, and will be depreciated under the five - year MACRS. Net working capital is expected to decine by $5.000. The firm has a 40 percent tax rate on ordinary income and long - term capital gain. The terminal cash flow is OA. $24.000 OB. $26.000 OC. $14,000 DD. S16.000

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 5E: Cash payback period for a service company Janes Clothing Inc. is evaluating two capital investment...

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