The XYZ Block Company purchased a new office computer and other depreciablecomputer hardware for $12,000. During the third year, the computer is declaredobsolete and is donated to the local community college. Using an interest rate of10%, calculate the Present Worth of the depreciation deductions. Assume that nosalvage value was initially declared and that the machine was expected to last 5years.Round to nearest dollar. Use STRAIGHT LINE DEPRECIATION to calculatedepreciation schedule.

Present value of annuity PV = A * wherePV = present valueA = periodic paymentsr = interest raten =…

Answered: The XYZ Block Company purchased a new…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

The equipment has a delivered cost of $57,000. An additional $3,000 is required to install the new equipment. The new control device falls into the 7-year class for depreciation and will be depreciated using MACRS as per the Tax Reform Act of 1986 and a further modification in 2005. At the end of 8 years, the estimated Salvage Value of the new equipment is $20,000.The existing control device has been in use for approximately 10 years, and it has been fully depreciated (that is, its book value is zero for the old device). However, its current market value for the old device is estimated to be $5,000. The applicable tax rate is 34%. The new control device requires lower maintenance costs and frees personnel who would otherwise monitor the system. In addition, it reduces product wastage. In total, it is estimated that during its eight-year life, the yearly savings will amount to $20,000 if the new control device is used. Yearly sales revenue is unchanged. The illustrative firm’s cost of…
Badhibe
Del Norte Brick Co. is located near the intersection of Texas, New Mexico, and Mexico. Improved access to the company’s property is via a small, privatelyowned bridge across the Rio Grande River. The cost was $770,000 and it has a recovery period of 15 years. Determine the depreciation and book value for year three according to the MACRS method.
Mom's Cookies, Inc., is considering the purchase of a new cookie oven. The original cost of the old oven was $47,000; it is now five years old, and it has a current market value of $21,000. The old oven is being depreciated over a 10-year life toward a zero estimated salvage value on a straight-line basis, resulting in a current book value of $23,500 and an annual depreciation expense of $4,700. The old oven can be used for six more years but has no market value after its depreciable life is over. Management is contemplating the purchase of a new oven whose cost is $27,000 and whose estimated salvage value is zero. Expected before-tax cash savings from the new oven are $3,200 a year over its life, you can use bonus depreciation on the oven, and the cost of capital is 10 percent. Assume a 21 percent tax rate. What will the cash flows for this project be? (Note that the $47,000 cost of the old oven is depreciated over ten years at $4,700 per year. The half-year convention is not used for…
On June 30, 2016, Rosetta Granite purchased a machine for $120,000. The estimated useful life of the machine is eight years and no residual value is anticipated. An important component of the machine is a specialized highspeed drill that will need to be replaced in four years. The $20,000 cost of the drill is included in the $120,000 cost of the machine. Rosetta uses the straight-line depreciation method for all machinery. Required: 1. Calculate depreciation for 2016 and 2017 applying the typical U.S. GAAP treatment. 2. Repeat requirement 1 applying IFRS.
Please help me
Alfredo Company purchased a new 3-D printer for $850,000. Although this printer is expected to last for ten years, Alfredo knows the technology will become old quickly, and so they plan to replace this printer in three years. At that point, Alfredo believes it will be able to sell the printer for $10,000. Calculate depreciation using the straight-line method.
Machine A has been completely overhauled for $9000 and is expected to last another 12 years. The $9000 was treated as an expense for tax purposes last year. It can be sold now for $30,000 net after selling expenses, but will not have salvage value 12 years hence. It was bought new 9 years ago for $54,000 and has been depreciated since then by straight-line depreciation using a 12-year depreciable life. Because less output is now required, Machine A can now be replaced with a smaller Machine B. Machine B costs $42,000, has anticipated life of 12 years, and would reduce operating costs by $2500 per year. It would be depreciated by straight-line depreciation with a 12-year depreciable life and no salvage value. Both the income tax and capital gains tax rates are 40%. Compare the after-tax annual cost of the two machines and decide whether Machine A should be retained or replaced by Machine B. Use a 10% after-tax rate of return in the calculations
Alfredo Company purchased a new 3-D printer for $863,000. Although this printer is expected to last for ten years, Alfredo knows the technology will become old quickly, and so they plan to replace this printer in three years. At that point, Alfredo believes it will be able to sell the printer for $17,000. Calculate depreciation using the straight-line method.
Nikul
Can I please get some help and a explaination of how on this question?(5.10) Onslow Company purchased a used machine for $240,000 cash on January 2. On January 3, Onslow paid $10,000 to wire electricity to the machine. Onslow paid an additional $2,000 on January 4 to secure the machine for operation. The machine will be used for six years and have a $28,800 salvage value. Straight-line depreciation is used. On December 31, at the end of its fifth year in operations, it is disposed of.\\ Record the first year year-end adjusting entry for the depreciation expense of the used machine. Note: Enter debits before credits. Date General Journal Debit Credit December 31 Record the year of disposal year-end adjusting entry for the depreciation expense of the used machine. Note: Enter debits before credits. Date General Journal Debit Credit…
LLED has purchased a new chip making machine for $1,500,000 with a salvage value of $100,000in 10 years. The LLED company is trying to determine the best method of depreciation. Create atable and calculate the deprecation amount for each year using straight line, double decliningbalance, and MACRS (10 yr property class). For SL and DDB we will not depreciate below thesalvage value. Using a MARR of 10% calculate the present worth of the depreciation deductions.Which is the preferred method of depreciation for LLED?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS