TJ Industries has revenue of $400,000 and expenses of $250,000. The depreciation cost is $80,000 and marginal tax rate is 35%. Calculate depreciation tax shield Group of answer choices 33,000 25,000 28000 15470

TJ Industries has revenue of $400,000 and expenses of $250,000. The depreciation cost is $80,000 and marginal tax rate is 35%. Calculate depreciation tax shield Group of answer choices 33,000 25,000 28000 15470

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

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Question

TJ Industries has revenue of $400,000 and expenses of $250,000. The depreciation cost is $80,000 and marginal tax rate is 35%. Calculate depreciation tax shield

Group of answer choices

33,000

25,000

28000

15470

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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You work for Tamimi Industries, which purchased robotics equipment for $430,000 six years ago. The equipment is in place today and has a total 10-year useful life, no salvage value, and a 5-year MACRS recovery period. The effective tax rate is 23% and the actual cash flow and depreciation amounts are shown. Year GI, $ Expenses, $ Depreciation, $ 1 250,000 −120,000 100,000 2 280,000 −120,000 160,000 3 200,000 −122,000 96,000 4 260,000 −124,000 57,600 5 260,000 −126,000 57,600 6 180,000 −128,000 28,800 EBIT is calculated for years 1 to n and includes the P or S amounts. Group startsTrue or False
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Net Salvage Value Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $14.4 million, of which 85% has been depreciated. The used equipment can be sold today for $4.8 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. $
Molton Inc. made a $60,000 cash expenditure this year (year O). Compute the after-tax cost if Molton must capitalize the expenditure and amortize it ratably over three years, beginning in year O. Molton has a 21% marginal tax rate and uses a 8% discount rate. Year 1 Year 2 Year 3 PV Factor at 8%.9259 .8573 .7938 $48,310 $47,400 $40,344 $60,000
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.
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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
10.Landscaping costs can be deducted in the determination of net business income, even if they involve items that would normally be considered capital assets True or False? 11. For the hobby farmer, deductible farming losses for a year are restricted to $2,500, plus one-half of the next $30,000. True or False?
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