Pertinent information for two alternatives A and B isshown below. If i=10% / year and the effectiveincome tax rate is 40%, answer the followingtrue/false questions.Basis, $CFBT, $MACRSRecovery, YearsSalvage Value, $ 20,000Useful Life, Years 6Alt. A200,00040,0005O TrueFalseAlt.B300,00050,0005The book value (BV) at the end of year 4 for Alt. A isgreater than $35,000.30,0007

Since the MACRS recovery is 5 years so the depreciation rates will be seen in the MACRS table which…

Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective income tax rate is 40%, answer the following true/false questions. Alt. A 200,000 40,000 5 Basis, $ CFBT, $ MACRS Recovery, Years Salvage Value, $ 20,000 Useful Life, Years 6 Alt.B 300,000 50,000 5 30,000 7 The book value (BV) at the end of year 4 for Alt. A is greater than $35,000,

Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective income tax rate is 40%, answer the following true/false questions. Alt. A 200,000 40,000 5 Basis, $ CFBT, $ MACRS Recovery, Years Salvage Value, $ 20,000 Useful Life, Years 6 Alt.B 300,000 50,000 5 30,000 7 The book value (BV) at the end of year 4 for Alt. A is greater than $35,000,

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A 150,000 100,000 Basis, $ Gross Income (GI), $ Operating Expense (OE), $ Salvage Value, $ MARCS Recovery, Years True 30,000 False 15,000 5 Alt.B The depreciation charge for Alt. B at the end of year 4 is greater than $30,000. 225,,000 100,000 10,000 22,500 5
BigCo is considering leasing the new equipment that it requires, for $153,000 a year, payable in advance. The cost of the equipment is $900,000, has a CCA rate of 30% and will last for 6 years. The expected scrap value is $162,000. Assume that the first CCA tax deduction would be taken at the end of the first year. BigCo has lots of other equipment in this asset pool. The tax rate is 30% and the cost of debt is 9%. a. Should BigCo lease or buy the equipment? Big Co should (Click to select) lease buy the equipment. b. What is the maximum lease payment that would make BigCo indifferent between leasing or buying? (Round your answer to 4 decimal places.) The maximum lease payment $
A startup is considering buying a $295,000 piece of equipment. If it purchases the equipment, it will take a loan for the entire amount; the interest on the loan is 2%, and the loan will be repaid in 5 equal end of year payments. The startup estimates that the equipment would generate an additional $170,000 of revenue each year. At the end of 5 years, the equipment would have a salvage value of $21,000. The tax rate is 24%. Assuming a planning horizon of 5 years, that the equipment is depreciated using MACRS (3-year property class), and that the medical practice uses an after-tax MARR of 9%, compute the PW and determine whether the startup should invest in the equipment. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. $ Carry all interim calculations to 5 decimal places and then round…
An injection-molding machine has a first cost of $1,050,000 and a salvage value of $225,000 in any year. The maintenance and operating cost is $235,000 with an annual gradient of $75,000. The MARR is 10%. What is the most economic life? 13-1 P Maint A Maint G (A/G, 10%, n) Salvage PV of S n EUAC-P EUAC-M EUAC-S EUAC Minimum? 1050000 235000 75000 225000 1 1050000 235000 75000 225000 2 1050000 235000 75000 225000 3 1050000 235000 75000 225000 4 1050000 235000 75000 225000 5 1050000 235000 75000 225000 6 1050000 235000 75000 225000 7 1050000 235000 75000 225000 8 Can you please teach how to calculate these number I don't know how to solve in excel I…
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Solve it manually, thanks.
Daily Enterprises is purchasing a $10.2 million machine. It will cost $51,000 to transport and install the machine. The machine has a depreciable life of 5 years and will have no salvage value. The machine will generate incremental revenues of $3.8 million per year along with incremental costs of $1.1 million per year. If Daily's marginal tax rate is 21%, what are the incremental earnings (net income) associated with the new machine? The annual incremental earnings are $ (Round to the nearest dollar.)
A company is going to buy a new machine for manufacturing its products. Three machines are available. Data is as follows: Money is worth 17% before taxes to the company. Which machine should be chosen? Use ROR
Depreciation can be regarded as all the following except a. An accounting concept b. Decrease in value of an asset due to usage and time c. A cash deduction that is reinvested at the MARR d. A tax saving measure on financial statements After you have conducted a future worth comparison of alternatives, what factor do you multiply the FW values by in order to obtain the AW values of the alternatives? a. (F/A, i, n) b. (F/P, i, n) c. (A/P, i, n) d. (A/F, i, n)
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A large company is planning to purchase equipment costing $220,000 and will depreciate it fully using straight-line depreciation over 8 years. The company expects that the investment will have an annual benefit of $54,000. Each use of the equipment will also provide a benefit of $25. In 5 years, there will be no salvage value for the equipment. The company's combined marginal tax rate is 24%. Based on 12% after-tax MARR, how many uses of the equipment must the company have each year in order to justify its investment? Question 8 Part A: Choose the correct Before Tax Cash Flow Diagram for this scenario from the following choices. Option A 0 1 220,000 Option C 0 1 G=25 54000 i = 12% 8 i = 12% 54000 +25X Option B G=25X 54000 0 1 220,000 Option D 0 1 8 i = 12% 54000+25X i = 12%
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