Year 0 Year 1 Year 2 Year 3 Year 4 Year 5MACRSDepreciation Rate20.00% 32.00% 19.20 % 11.52 % 11.52% 5.76%A bakery invests $30,000 in a light delivery truck. This was depreciated using the five-year MACRS schedule shownabove. If the company sold it immediately after the end of year 2 for $21,000, what would be the after-tax cash flowfrom the sale of this asset, given a tax rate of 20%?OA. $8,640OB. $12,360OC. $2,472O D. $18,528****

Cost of asset = $30,000 The book value of the asset at the end of year 2 is

Answered: Year 0 Year 1 Year 2 Year 3 Year 4 Year…

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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On 1 January 20X1 a business purchased a laser printer costing $1,800. The printer has an estimated life of 4 years after which it will have no residual value. 6 Calculate the depreciation charge for 20X2 on the laser printer on the straight line basis:
A mixer was purchased two years ago for $63346 and can be sold for $171667 today. The mixer has been depreciated using the MACRS 5-year recovery period and the firm pays 40 percent taxes on both ordinary income and capital gain. Find the after tax proceeds.
Alfredo Company purchased a new 3-D printer for $90,000. This printer is expected to last for ten years, at which time, Alfredo believes it will be able to sell the printer for $15,000. Calculate yearly depreciation using the double-declining-balance method. PLEASE NOTE: All whole dollar amounts will be with "$" and commas as needed (i.e. $12,345). Year 1 Depreciation: _________________ Year 2 Depreciation: _________________ Year 3 Depreciation: _________________ Year 4 Depreciation: _________________ Year 5 Depreciation: _________________ Year 6 Depreciation: _________________ Year 7 Depreciation: _________________ Year 8 Depreciation: _________________ Year 9 Depreciation: _________________ Year 10 Depreciation: _________________
Problem: A leasing company is planning to purchase an asset for $15,000 with a 6-year life and assume no salvage value. The company can depreciate the asset over its useful life using a straight-line depreciation method. The company has just issued five-year notes at an interest rate of 10% per year. Tax rate = 21%. Maintenance (and other) costs = $1,350 per year for years 1-4, $2,200 per year for years 5-6. What is the after-tax break-event rent for this lease if payments occur at the beginning of the periods? (Hint: Use an excel sheet to solve this problem. You need to draw the lease cash flow table.)
6..An in-place machine with B = $110,000 was depreciated by using Modified Accelerated Cost Recovery System (MACRS) over a 3-year period. The machine was sold for $60,000 at the end of year 2 when the company decided to import the item that required the use of the machine. In year 2, gross income (GI) = $1 million and operating expenses (OE) = $500,000. Determine the tax liability in year 2 if Te = 35%.
Book value and taxes on sale of assets Troy Industries purchased a new machine 5 year(s) ago for $76,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule. Assume 40% ordinary and capital gains tax rates. a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $91,200; $53,200; $3,800; and $2,700. a. The remaining book value is $ (Round to the nearest dollar.)
Book value and taxes on sale of assets Troy Industries purchased a new machine 4 year(s) ago for $82,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule. Assume 21% ordinary and capital gains tax rates. a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts: $98,400; $57,400; $13,940; and $9,800. a. The remaining book value is $ (Round to the nearest dollar.) Data table (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes Recovery year 1 2 3 4 10 years 10% 18% 14% 12% 9% 8% 7% 6% 6% 6% 4% 100% 100% 100% 100% *These percentages have been rounded to the nearest whole percent to simplify calculations while retaining realism. To calculate the actual depreciation for tax purposes, be sure to apply the actual unrounded percentages or…
13) year MACRS approach. However, after 3 years your company sold the machinery for $50,000. Compute the after-tax gains or losses your company makes on this sale. Assume a tax rate of 21%. Your company bought a piece of machinery for $80,000, and depreciated it using a 7-
Aa.2
Ultra-clean special handling devices used in the filling process for the manufacture of baby food are placed into use at a cost of $850,000. These devices are expected to be useful for 4 years with a negligible salvage value at that time. Compare MACRS to traditional depreciation methods by calculating yearly depreciation allowances, present worth of the depreciation allowances, and book value for each year using each of the following. MARR is 11%. a. MACRS-GDS as is proper over its property class depreciation life. b. DDB taking a full deduction in the first year, with the last deduction in year 3. c. DDB switching to straight-line, taking a full deduction in the 1st year, with the last deduction in year 3. d. SLN taking a full deduction in the 1st year, with the last deduction in year 3.
hh. Subject :- Accounting
An office furniture costing $110,000 has a useful life of 10 years. Fedex took $1200 to deliver and install the furniture. The salvage value of the furniture at the end of its useful life of 10 years is $2500. The company places the furniture in service during the last quarter. What will be the allowed depreciation amount for year 9 to find taxable income? O $2500 $8495.68 O $1250 O none

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