Please don't use Ai solution You have purchased a machine for $192,572 and are depreciating it using a five-year MACRSschedule (20%, 32%, 19.2%, 11.52%, 11.52%. 5.76%). You are in a 26% tax bracket and will be ableto sell the machine for $71,470 at the end of year four. Calculate your net incremental cash flow fromthe sale of this machine. (Round answer to nearest dollar)

The question requires the determination of the incremental cash flow for the sale of a machinery.…

Answered: You have purchased a machine for…

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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You purchased a machine for $1.17 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 25%. If you sell the machine today (after three years of depreciation) for $ 765,000, what is your incremental cash flow from selling the machine?
A milling machine costing $18,000 will be depreciated using 7-year MACRS. The machine will be sold at the end of year 8 for $1000. The combined tax rate is 25%, and the MARR is 10%. What is the present worth of the after-tax cash flows? Submit your spreadsheet. Answer to the nearest whole dollar without the $ sign.
DON Corporation is contemplating the purchase of a machine that will produce net after-tax cash savings of $22.000 per year for 5 years. At the end of five years, the machine can be sold to realize after-tax cash flows of $5,300 Assuming a 9% discount rate, calculate the total present value of the annual cash savings and the salvage value of the machine (EV of 51, PV of 51. EVA of S1, and PVA of 5) (Use appropriate factor(s) from the tables provided. Round final answer to the nearest whole dollar) Total presentan
Consider an asset that costs $311,000 and is depreciated straight-line to zero over its six-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $58,000. If the relevant tax rate is 34 percent, what is the aftertax cash flow from the sale of this asset? Can the calculator and excel solution be provided?
A property could be sold today for $2 million. It has a loan balance of $1 million and, if sold, the investor would incur a capital gains tax of $250,000. The investor has determined that if it were sold today, she would earn an IRR of 15 percent on equity for the past five years. If not sold, the property is expected to produce an after-tax cash flow of $50,000 over the next year. At the end of the year, the property value is expected to increase to $2.1 million, the loan balance will decrease to $900,000, and the amount of capital gains tax due is expected to increase to $255,000.a. What is the marginal rate of return for keeping the property one additional year?b. What advice would you give the investor?
You have an opportunity to purchase a piece of vacant land for $30,000 cash. If you plan to hold it for 15 years and then sell it at a profit. During this period, you would have to pay annual property taxes of $600 and have no income from the property. Assuming that you would want a 10% rate of return from the investment, a) Draw a cashflow diagram. b) What net price would you have to sell it in the next 15 years?
Your firm purchased machinery for $9.5 million and received immediate 100% bonus depreciation. The project will end after 5 years. If the equipment can be sold for $4.0 million at the completion of the project, and your firm's tax rate is 21%, what is the after-tax cash flow from the sale of the machinery? Note: Enter your answer in millions rounded to 4 decimal places. After-tax cash flow millions
Last year you purchased a machine for $1M. You want to sell it today for $0.8M and replace it with a new machine that costs $1.2M. Both machines are classified as 20-year property (with depreciation rates of 5% and 9.5% in the first two years). The replacement will increase EBITDA by $100,0000. What are the cash flows at the time of replacement? The tax rate is 35%. Group of answer choices -$452,000 -$400,000 -$152,500 -$347,500 -$300,000
You purchased a machine for $1 million three years ago and have been applying straight-line depreciation to zero for a seven-year life. Your tax rate is 30%. If you sell the machine right now (after three years of depreciation) for $700,000, what is your incremental (after-tax salvage) cash flow from selling the machine?
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Hayes, Inc. is considering buying a large piece of equipment for $80,000. Hayes expects that the equipment will last for ten years and then be worthless. During its life, Hayes predicts the equipment will earn $12,000 per year net income before taxes. Hayes is in the 21% tax bracket. What is the expected AFTER-TAX cash flow on this piece of equipment?

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