What is the expected after-tax cash flow from selling a piece of equipment if TwoPlus purchases the equipment today for $162,000.00, the tax rate is 20.10percent, the equipment is sold in 4 years for $36,600.00, and MACRS depreciation is used where the depreciation rates in years 1, 2, 3, 4, and 5 are 20%, 32%,19%, 12%, and 10%, respectively?ос$27,026.46 (plus or minus $10)$34,778.94 (plus or minus $10)$57,897.96 (plus or minus $10)$31,522.74 (plus or minus $10)None of the above is within $10 of the correct answer

The expected after-tax cash flow from selling the equipment is $34,778.94 (plus or minus…

Answered: What is the expected after-tax cash…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You are evaluating two different silicon wafer milling machines. The Techron | costs $264,000, has a 3-year life, and has pretax operating costs of $71,000 per year. The Techron Il costs $460,000, has a 5-year life, and has pretax operating costs of $44,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $48,000. If your tax rate is 22 percent and your discount rate is 12 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) > Answer is complete but not entirely correct. Techron I $ -134,840.83 Techron II $ -107,570.18
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Depreciation can be applied to machinery, equipment, vehicles, telephone, computers, furniture. True or False
An oil refinery has decided to purchase some new drilling equipment for $440,000. The equipment will be kept for 7 years before being sold. The estimated SV for depreciation purposes is to be $18,000. Using the SL method, what is the BV at the end of the depreciable life? Choose the correct answer below. A. The BV at the end of the depreciable life is $36,000. B. The BV at the end of the depreciable life is $44,857. C. The BV at the end of the depreciable life is $18,000. D. The BV at the end of the depreciable life is $0.
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
10.
Calculate the value of depreciation of gross value is $120 million and the net value is $100 million
Malu Luigi Company makes an internal policy that for every new machine purchased, the annual depreciation cost should not exceed 15% of the first cost and should cost nothing at the end of its life. Determine the service life of brand new P 500,000 machine using SOYD.
4. New equipment used in construction with a cost basis of $60,000 with a zero salvage value at the end of its useful life of 6 years. Use the Double Declining method to calculate the depreciation charge in year 4. $7,494 $2,633.75 $5,925.93 $10,000
An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000, and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Double declining balance method is used to calculate the depreciation cost. a. What is the book value of the asset at the end of 5 years? b. What is the depreciation amount in the third year?
3. An investment of $180,000 with a salvage value of $30,000 in 10 years can reduce annual operating cost by $36,000. Use MACRS with depreciation life of 5 years and effective tax of 38% to calculate the present worth of ATCF. MARR= 10%
You are evaluating two different silicon wafer milling machines. The Techron I costs $270,000, has a 3-year life, and has pretax operating costs of $73,000 per year. The Techron II costs $470,000, has a 5-year life, and has pretax operating costs of $46,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $50,000. If your tax rate is 24 percent and your discount rate is 10 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Techron I Techron II

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