6.10        Calculating Salvage Value An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an acquisition cost of $7.6 million and will be sold for $1.4 million at the end of the project. If the tax rate is 21 percent, what is the after

Q: ABC, Inc. is considering the purchase of a $116,000 piece of equipment. The equipment is classified…

A: Given, Equipment cost = $116,000 MACRS 5-year property: At year 1 Rate = 20.00% At year 2 Rate = 32%…

Q: Consider an asset that costs $665,000 and is depreciated straight-line to zero over its nine-year…

A: Calculation of after cash flow from sale of asset:The after-cash flow from sale of asset is…

Q: Estimate the approximate before-tax rate of return (ROR) for a project that has a first cost of…

A: Introduction: Return on investment: Return on investment is the measurement of the performance of…

Q: Consider a piece of equipment that initially cost $8,000 and has these estimated annual expenses and…

A: The table below shows the after tax total cost Approximation after tax total cost=…

Q: An asset used in a 4-year project falls in the 5-year MACRS class for tax purposes. The asset has an…

A: Asset is an important investment for any particular project. After the project, particular assets…

Q: Your company is considering a new project that will require $10,000 of new equipment at the start of…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: 5. You have one asset in CCA Asset Class 12. You purchased this asset five years prior for $10.25…

A: CCA or Capital Cost Allowance- It is an annual deduction in the Canadian Tax Code. Under CCA,…

Q: ZUD Inc is evaluating a 10-year project that requires an investment today of $9.4 million in assets…

A: Solution:- Depreciation tax shield means the tax benefit arising due to depreciation expense. So,…

Q: for this equipment. 6. Calculating Salvage Value Consider an asset that costs $635,000 and is…

A: Cost of assets = $635,000 Life = 8 Years Annual depreciation = 635000/8 = $79375 Life used = 5 Years…

Q: 57. An asset was purchased for P66,000. The asset is expected to last for 6 years and will have a…

A: Accounting Rate of Return The accounting rate of return is the percentage return that is earned on…

Q: An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax…

A: To calculate the BV at the end of four years, we must first calculate the accumulated depreciation…

Q: Number 8

A: The operating cash flows help to measure the cash generating ability of a company from its core…

Q: What is the net effect on a project's NPV, if it's salvage value in 10 years increases from $24126…

A: NPV is the difference between discounted Cash inflow and cash outflow. When determining discounted…

Q: provide a benefit of $30. In 5 years, there will be no salvage value for the equipment. T company's…

A:

Q: An asset used in a 4-year project falls in a 5-year MACRS class for tax purposes. The asset has an…

A:

Q: 7. The table below details three possible alternatives to replace existing machinery. The life of…

A: The alternate with the lowest present value of net expense (capital expenditure + PV of annual…

Q: 9

A: Recapture depreciation is a gain to the extent of depreciation amount…

Q: A firm has recently purchased Class 10 equipment for $100,000 with a CCA rate of 30%. What is the…

A: "Since you have asked multiple questions, we will solve the first question for you". If you want any…

Q: your company is considering a new project that will require $250,000 of new equipment at the start…

A: Annual Depreciation = (Cost of equipment - Salvage value) / Life of equipment   Annual Tax Benefit…

Q: our company, RMU Inc., is considering a new project whose data are shown below. Under the new tax…

A: Cash flow is the amount of cash that comes in (cash inflow) and that goes out (cash outflow) of a…

Q: An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax…

A: Here, Time Period of Project is 4

Q: 7. The table below details three possible alternatives to replace existing machinery. The life of…

A: In the given Question cost is given hence decision is taken on the basis of cost, wherever the cost…

Q: Project A requires an initial outlay of $10000 and will last for 5 years. The investment will be…

A: Depreciation tax shield refers to a benefit which an organization gets to reduce its taxable income…

Q: An asset was purchased for P66,000. The asset is expected to last for 6 years and will have a…

A: Net income = income before tax - tax = 7200- 7200*0.30 = 5040

Q: a). qw Inc. is considering the purchase of a $116,000 piece of equipment. The equipment is…

A: Cost of equipment = $ 116000 Sale price after 2 years = $ 50000 Tax rate = 35% Book value after 2…

Q: What is the Aftertax salvage value?

A: Book value as on date of sale =cost-accumulated depreciation =5,200,000(1-0.2-0.32-0.192-0.1152)…

Q: A company anticipates a taxable cash expense of $80,000 in year 2 of a project. The company's tax…

A: Cash expense $80,000   Less: Tax benefit ($80,000 x 30%) $24,000   Net cash expense $56,000

Q: what will be the new net present value?

A: Net Present Value (NPV) is a discounting method used in capital budgeting process. It compares the…

Q: Your Company is considering a new project that will require $2,000,000 of new equipment at the start…

A: Solution:- Depreciation is a tax deductible expense and therefore companies get tax shield on…

Q: 7) The Shell Corp. owns a piece of petroleum drilling equipment that costs $100,000 and will be…

A: Present worth of the investment shows that the worth of money in present is more valuable than the…

Q: 8) The Shell Corp. owns a piece of petroleum drilling equipment that costs &100,000 and will be…

A: Present value is the current worth of the amount that is expected to be received at some specified…

Q: A firm depreciated its assets with regard to an investment to $0.00 book value by the end of the…

A: Deprecation is the accounting method under which cost of assets will be claimed as expenses by…

Q: 9. The Lumber Yard is considering a 5-year project that requires initial investment of $96,000 in…

A: We’ll answer the first question since the exact one wasn’tspecified. Please submit a new question…

Q: n asset used in a four-year project falls in the five-year MACRS class for tax purposes. he asset…

A: MACRS is accelerating depreciation method in which depreciation is more beginning and decrease in…

Q: 3. An investment of $500,000 generates an annual income of$150,000 over the next4 years with a…

A: Present worth is an equivalence method of analysis in which estimated cash flows are discounted…

Q: Karsted Air Services is now in the final year of a project. Theequipment originally cost $29…

A: Salvage value is the value of an asset at the end of its life. It can be calculated by deducting the…

Q: An asset with a first cost of $250,000 and a 5-year recovery period is subject to MACRS…

A: Answer has been given in the next sheet.

Q: Consider an asset that costs $369,600 and is depreciated straight-line to zero over its 7-year tax…

A: cost of the asset = $369,600 Depriciation each year =$369,600/7 = 52800 Value of asset after 4 years…

Q: AFTER-TAX SALVAGE VALUE Karsted Air Services is now in the final year of a project. The equipment…

A:

Q: 5. A project is estimated to cost P100, 000, last 8 years and have a P10, 000 salvage value. The…

A: Present value is the sum of the current value of money of future cash flows. It is also known as a…

Q: 6.1 A project requires the purchase of new equipment at a cost of $12,000, which will be…

A: Expenses means the amount spent on running the business.

Q: The $500,000 investment in the surface-mount placement (SMP) machine in an electronics manufacturing…

A: If the salvage value of an asset is adjusted for the tax rate then it is known as after- tax salvage…