An in-place machine with B= $165,000 was depreciated by using Modified Accelerated Cost Recovery System (MACRS) over a 3-yearperiod. The machine was sold for $60,000 at the end of year 2 when the company decided to import the item that required the use ofthe machine. In year 2, gross income (GI) = $1 million and operating expenses (OE) = $500,000. Determine the tax liability in year 2 ifTe = 35%.The tax liability in year 2 is determined to be $ 162167.95

Tax liability is defined as the total amount of money owed to the government in taxes by an…

Answered: n-place machine with B= $165,000 was…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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PLEASE USE EXCEL AND SHOW FORMULAS Six years ago, a company purchased $30,000 of equipment. The equipment has just been sold for $5000. The equipment was depreciated using 50% bonus depreciation / 50% MACRS (using a 5-year recovery period). The actual savings due to the purchase of the equipment is shown below. The firm's MARR is 12% and it's tax rate is 25%. What is the after-tax present worth of the investment? Year 1 2 3 4 5 6 Savings 5000 6000 7000 7000 4000 3000
Bison Gear and Engineering of St Charles, IL, makes sensorless and brushless dc gear motors suited for foodservice equipment, factory automation,alternative energy systems, and other specialty machinery applications. The company purchased an asset 2 years ago that has a 5-year recovery period. If the depreciation charge by the MACRS method for year 3 is $14,592, what was (a) the first cost of the asset, and (b) the depreciation charge in year 1?
Small railcar manufacturing machinery had an $180,000 initial cost and a $30,000 projected salvage value after five years of use. In year 2, the revenue was $620,000, and the operating costs were $98,000. What would the difference in taxes paid in year 2 be if the depreciation method was straight line rather than MACRS if the company's effective tax rate was 36%? Year 2's MACRS depreciation rate is 32%.
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
A machine worth P10,000 depreciates in value each year by 15% of its value at the beginning of that year. Find its book value when it is 10 years old. PLEASE ANSWER WITH COMPLETE SOLUTION
Calculate Lopez Enterprises' gross profit at a CFAT of $2.5 million, $900,000 in expenses, $900,000 in depreciation costs, and a 26.4% effective tax rate.
An asset purchased for $50,000 is to be depreciated over 5 years using the straight line method. Salvage value is $10,000. Its book value after 3 years is: O 25.500 24,000 25,000 KD 26.000
Freeman Engineering paid $40,000 for specialized equipment for use with their new global positioning system/geographic information system (GPS/GIS). The equipment was depreciated over a 3-year recovery period using Modified Accelerated Cost Recovery System (MACRS) depreciation. The company sold the equipment after 2 years for $8,000 when it purchased an upgraded system. Determine the amount of the depreciation recapture or capital loss involved in selling the asset. The amount of capital loss is determined to be $____
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?
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A machine that had a first cost of $120,000 was depreciated by the MACRS method over a 3-year period. The machine was sold for $60,000 at the end of year 2, because the company decided to import the component made by the machine. If the company’s gross income was $1.4 million with operating expenses of $500,000, what was the tax liability in year 2 for an effective tax rate of 35%?
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?

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