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

See similar textbooks

Similar questions

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.)
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…
Aa.2
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
Book value and taxes on sale of assets Troy Industries purchased a new machine 4 year(s) ago for $80,000. 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: $96,000; $56,000; $13,600; and $9,500. a. The remaining book value is $ (Round to the nearest dollar.) ...
You purchase a new pizza oven for $9,950 which will have a scrap value of $900. Assuming a 35% depreciation rate, how much depreciation would you recognize in year one when using the Double Declining Balance depreciation method? $2,810 $3167.50 $3482.50 $3.572.75
please dont give handwritten answer thnku
None
Original Cost POST. ... Accumulated Depreciation for Previous Years DATE DESCRIPTION REF. DEBIT CREDIT ... Book Value, Beginning Year 4 1 20xx ... Revised Salvage Value 2 2. ... Revised Remaining Depreciation Cost 3 ... 4 Revised Useful Life 3 Years Revised Depreciation, Total Revised Depreciation, Per Year ...

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