You work for Tamimi Industries, which purchased robotics equipment for $500,000 sixyears ago. The equipment is in place today and has a total 10-year useful life, no salvagevalue, and a 5-year MACRS recovery period. The effective tax rate is 21% and the actualcash flow and depreciation amounts are shown.GI, S250,000280,000200,000260,000260,000180,000Expenses, $|-120,000-120,000F122,000-124,000-126,000128,000Depreciation, $100,000160,00096,00057,60057,60028,800Year131456EBIT is calculated for years 1 to nand includes the Por Samounts.True or FalseTrueFalse

Earnings before interest and taxes: During an accounting period, the operating income earned by an…

Answered: You work for Tamimi Industries, which…

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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Vandezande Incorporated is considering the acquisition of a new machine that costs $470,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are (ignore Income taxes.): Year 1 Year 2 Year 3 Year 4 Year 5 Incremental Net Operating Income $ 78,000 $ 84,000 $ 95,000 $ 58,000 $ 100,000 Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period of this investment is closest to: (Round your answer to 1 decimal place.) Multiple Choice 4.1 years 5.0 years 2.9 years Incremental Net Cash Flows $ 156,000 $ 163,000 $ 175,000 $ 160,000 $ 162,000 21 years
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K One year ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages; you can purchase it for $150,000 today. It will be depreciated on a straight-line basis over 10 years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes, depreciation, and amortization) of $50,000 per year for the next 10 years. The current machine is expected to produce EBITDA of $22,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, after which it will have no salvage value, so depreciation expense for the current machine is $10,000.00 per year. All other expenses of the two machines are identical. The market value today of the current machine is $50,000. Your company's tax rate is 35%, and the opportunity cost of capital for this type of equipment is 12%. Is it profitable to replace the…
A new piece of equipment costs $500,000, and depreciated according to the 5 year MACRS schedule. Assume the equipment makes you earn 350,000 a year more, and increases the operating expenses by $100,000 annually. Assume a federal applicable tax rate of 32%. For year 2, calculate: (a) before tax cash flow (BTCF) (b) taxable income (c) taxes due (d) after tax cash flow (ATCF)
Suppose Hampton Corporation sells land for $8,000,000. Hampton paid $5,000,000 for the land several years ago. Assuming a marginal tax rate of 34%, calculate the after-tax cash flow resulting from the land sale.
a). qw Inc. is considering the purchase of a $116,000 piece of equipment. The equipment is classified as 5-year MACRS property. The company expects to sell the equipment after two years at a price of $50,000. The tax rate is 35 percent. What is the expected after-tax cash flow from the anticipated sale?
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A firm purchased $62,800 of fixed assets two years ago. The company no longer needs these assets so it is going to sell them today for $28,500. The assets are classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for Years 1 to 6, respectively. What is the net cash flow from this sale if the firm's tax rate is 23 percent and no bonus depreciation is taken? $29,281.04 $26,576.00 $28.878.12 $27,516.60 O $29,648.12
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11 Nicanor bought a car ten years ago costing Php 1,000,000.00. For income tax purposes, the car is full depreciated. Scrap value is 10% of cost as indicated in records. A person engaged in buying or selling valued the property at php 70,000. A buyer is willing to pay for php 50,000.00. What is the value to be used in computing estate tax? a. 0 b. 50,000 c. 100,000 d. 70,000 provide solution pls

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