Newton Company is considering the purchase of an asset that will provide a depreclation tax shleld of $10,000 per year for 10 years. Assuming the company is subject to a 40% tax rate during the perlod and a zero salvage value, what is the depreciable cost of the asser? Multiple Choice $100,000 $250,000 $400,000 Can't be determined from the information provided
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- Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $8.4 million, of which 65% has been depreciated. The used equipment can be sold today for $4.2 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.An asset used in a 4-year project falls in the 5-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $18,720,000 and will be sold for $4,160,000 at the end of the project. If the tax rate is 22 percent, what is the aftertax salvage value of the asset?Net Salvage Value Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $23.2 million, of which 85% has been depreciated. The used equipment can be sold today for $5.8 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
- Milagros Company is considering an investment in equipment for $60,000. Milagros uses the straight-line method of depreciation with no mid-year convention. In addition, its tax rate is 40 percent and the life of the equipment is five years with no salvage value. The expected income before depreciation and taxes is projected to be $30,000 per year. What is the payback period in years approximated to two decimal points? Group of answer choices 2.63 2.00 1.00 4.00Belmont Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $290,000. The equipment will have an initial cost of $1,000,000 and have an 8 year life. If there is no salvage value of the equipment, what is the accounting rate of return? Multiple Choice 21.5% 29.0% 58.0% 24.0%Consider an asset that costs $369,600 and is depreciated straight-line to zero over its 7-year tax life. The asset is to be used in a 4-year project; at the end of the project, the asset can be sold for $46,200. If the relevant tax rate is 23 percent, what is the aftertax cash flow from the sale of this asset? Multiple Choice $72,006.00 $35,574.00 $311,862.00 $68,405.70 $75,606.30
- Net Salvage Value Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $6.4 million, of which 75% has been depreciated. The used equipment can be sold today for $3.2 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. LA$2.168 million which will be depreciated straight-line to a zero book value over the 10-year life 19.94) Gateway Communications is considering a project with an initial fixed asset cost of of the project. Ignore bonus depreciation. At the end of the project the equipment will be sold for an estimated $495,000. The project will not directly produce any sales but will reduce operating costs by $634,000 a year. The tax rate is 21 percent. The project will require $128,000 of net working capital which will be recouped when the project ends. What is the net present value at ( the required rate of return of 14.3 percent? A) $668,019.24 B) $701,414.14 C) $652,108.10 D) $570,475.57 E) $657,345.35Billy Bob's Monster Trucks is considering the purchase of some new vehicles. The total cost for the vehicles is $202,400 and they are to be depreciated straight-line to zero over 10 years. The vehicles will be used for 5 years, after which they can be sold for $25,300. If the relevant tax rate is 30 percent, what is the after-tax cash flow from the sale of this asset? (Do not round your intermediate calculations.) NOTE: Taxes are affected when the asset is sold at either a gain or loss over book value. Multiple Choice O $45,666 $17,710 $48,070 $336,502 $50,474 ↓
- Net Salvage Value Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $21 million, of which 85% has been depreciated. The used equipment can be sold today for $6 million, and its tax rate is 25%. What is the equipment's after-tax net salvage value? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar. $Daily Enterprises is purchasing a $10.41 million machine. It will cost $65,217.00 to transport and install the machine. The machine has a depreciable life of five years using the straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.47 million per year along with incremental costs of $1.23 million per year. Daily's marginal tax rate is 35.00%. The cost of capital for the firm is 11.00%. (answer in dollars..so convert millions to dollars) The project will run for 5 years. What is the NPV of the project at the current cost of capital?The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $277,000 and expenses by $184,000. The project will require $93,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 6-year life of the project. The company has a marginal tax rate of 21 percent. What is the depreciation tax shield? Multiple Choice $19,530 $9,695 $12,245 $6,440 $3,255