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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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.
Vijay
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
if you could help show how the answer was gotten please
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 ...
Your business buys a copy machine for $8,000 on January 1. You estimate that the copy machine will produce 350,000 copies during its useful life; its salvage value after producing the 350,000 copies is projected to be $1,000. The copy machine produced 75,200 copies in year 1 and 68,300 copies in year 2. Calculate depreciation for each of the first two years using the units-of-production method.
Chapter 10, Question 6
A company just purchased a new vehicle for $25,000. The vehicle's salvage value at EOY1 is 80% of the initial cost and decreases by 20% every year afterwards. The O&M cost in Year 1 is zero, but is $950 in Year 2 and increases by $950 annually. The company's MARR is 10%. The economic life of the vehicle is years. O A.6 OB.5 OC.7 OD.85 O E. 3 OF. 4
f Boeing depreciates its equipment that costs $120,000 over six years, using a straight-line depreciation schedule, at what amount it is reducing its value by each year, assuming there is no residual value? (format as $1,234.56, if there are zero cents format as $1,234.00)
A car was purchased by a florist business in May 20W7 for: $ Cost 20,000 Road tax 300 Total 20,300 The business adopts a date of 31 December as its year end. The car was traded in for a replacement vehicle in August 20X0 at an agreed value of $10,000. It has been depreciated at 25% per annum on the reducing-balance method, charging a full year's depreciation in the year of purchase and none in the year of sale. What was the profit or loss on disposal of the vehicle during the year ended December 20X0? A Profit: $1,436 B Profit: $1,562 C Profit: $3,576 D Profit: $3,672
REVIEW PROBLEM: SALE OF PROPERTY, PLANT AND EQUIPMENT The 1. M. Stoned Company acquired a machine from the Mickey Lobe Corporation on January 1, 20A0. The purchase price of the machine was $100,000, which did not include the 6% sales tax. Installation and delivery charges amounted to $4,000. One of the employees, Bad Wiser, damaged some parts while installing the machine. It cost $500 to repair the damage. The machine has a projected useful life or 10 years. The estimated salvage for the machine is $5,000. REQUIRED: 1. Compute the initial cost of the machine on January 1, 20X6: 100000 +1,000 +6% 6000 110,000 2. Compute the yearly depreciation expense under the straight-line method: 110,000 5,000 10,500 10 3. Show what this machine would look like on the Balance Sheet at the end of 20X9. 4. Assume the machine is sold on December 31, 20X9 for $60,000. Compute the gain or loss on the sale. Show all work clearly!!! (110,000- 60,000)x. 50,000 5. Record the sale.

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