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 proceed
Q: 12 d out of Your firm has expected profit before interest and taxes of R1 600. Your unlevered cost…
A: Expected profit before interest and taxes = R1 600Unlevered cost of capital = 13%Tax rate = 34% Debt…
Q: Nobility Homes, Incorporated, is a small maker of manufactured homes sold throughout the state of…
A: Sustainable growth rate refers to the maximum growth that a company can expect from its operations…
Q: For a premium bond, the: Multiple Choice current yield is equal to the coupon rate but less than the…
A: When delving into the intricacies of premium bonds, it is vital to comprehend the relationships…
Q: You are looking to buy a car. You can afford $370 in monthly payments for four years. In addition to…
A: > Monthly payment (P) = $370>Period =4 Years>Number of monthly payments (n) = 4*12 =…
Q: An investment is expected to produce the following annual year-end cash flows: Year 1 Year 2 Year 3…
A: Initial cost-$13,700YearCash flow1$5,000.002$1,127.003$0.004$5,240.005$6,240.006$1,363.40
Q: Solve for the unknown interest rate in each of the following: (De 2 decimal places.) Present Value…
A: The Time Value of Money is based on the principle that the value of money can change over time due…
Q: a. Use a spreadsheet (or a calculator with a linear regression function) to determine Stock X's beta…
A: Beta is used to determine how volatile a stock is in comparison to the market. It measures how…
Q: Complete problem: Yield to Maturity for Annual Payments XYZ Corporation' s bonds have 14 years…
A: The objective of this question is to calculate the yield to maturity (YTM) of XYZ Corporation's…
Q: South Penn Tracking is financing a new truck with a loan of $10,000 to be repaid in 5 annual…
A: Present Value of Ordinary Annuity refers to the concept which gives out the discounted or today's…
Q: e. What is the amount of accounts payable and accruals on its balance sheet? (Hint: Consider this as…
A: Formulas:Net working capital = Current assets - current liabilitiesGiven:The firm has accounts…
Q: The following information available from Petra+ Corporation: ROA Tax rate Total assets (include only…
A: The ROCE for a company implies a profitability measure that uses the after tax operating income and…
Q: Problem 9-29 Project Evaluation [LO 2] Aria Acoustics, Incorporated (AAI), projects unit sales for a…
A: Capital Budgeting is a technique to measure the profitability and feasibility of the project or…
Q: Use the following items to prepare a balance sheet and a cash flow statement Determine the total…
A: The objective of the question is to prepare a balance sheet and a cash flow statement using the…
Q: The following table presents some of the current year's financial data for the Happy Giraffe…
A: Variable Value Sales revenue = $400,000Operating costs and taxes = $45, 000Required investments in…
Q: Prepare an amortization schedule for a five-year loan of $70,000. The interest rate is 9 percent per…
A: Loan amount = $70,000Interest rate = 9%Number of years = 5 years
Q: Yosemite Corporation has an outstanding debt of $10.09 million on which it pays a 5 percent fixed…
A: > Gicev data:> Fixed rate = 54.3%> Niminal principal amount = 10090000> Current libour =…
Q: Calculate the arithmetic return, geometric return, and standard deviation for each stock. Note: Do…
A: The arithmetic mean is a measure of central tendency that is calculated by adding up all of the…
Q: Caccamise Company is expected to maintain a constant 5.3 percent growth rate in its dividends…
A: Growth rate = 5.3%Dividend yield = 7.1%The required return on a stock can be calculated using the…
Q: Problem 31-38 After-tax yields Suppose you are a wealthy individual paying 35% tax on income. What…
A: Yield refers to the returns that an investor earns by holding a fixed-income security till maturity,…
Q: A municipal engineer is evaluating two alternatives for adding capacity to the water supply system…
A: Capitalized cost is the present value of all cost including the initial cost and annual cost of…
Q: (Future value of a complex annuity) Springfield mogul Montgomery Burns, age 90, wants to retire at…
A: The sum of all equal payments made over a given length of time, plus a predetermined interest rate,…
Q: A financial manager must choose between four alternative Assets: 1, 2, 3, and 4. Each asset costs…
A: IRR is also known as Internal rate of Return. It is a capital budgeting technique which helps in…
Q: Bryan purchased a house for $500,000. She made a down payment of 15.00% of the value of the house…
A: Monthly payment refers to an amount that is paid every month for the repayment of a loan amount by…
Q: Question 4 (i) What is the approximate annualized yield on a 6-month Treasury bill with a face…
A: The first part of the question is asking for the annualized yield on a 6-month Treasury bill. The…
Q: Indigo Inc. is going public and issuing 150,000 shares of common stock. The capital raised in the…
A: It is given that Indigo Inc. is going forward with an initial public offering (IPO) and issuing…
Q: When Robin borrowed $1680.00, she agreed to repay the loan in two equal payments, to be made 50 days…
A: Amount borrowed: $1,680Interest rate: 2%Number of days in which first equal payment: 50Number of…
Q: Your business has zero debt, a cost of equity of 21%, a cost of debt equal to 8%, and a tax rate of…
A: Cost of equity is the percentage of interest expected by investors in the equity. Levered Equity is…
Q: Assume we are in July, 2023. In July of 2023, the share prices of company B are $80 per share. You…
A: An option is a derivative instrument which gives the buyer the right but not the obligation to…
Q: Under Armour, Incorporated is an American supplier of sportswear and casual apparel. Following are…
A: The sustainable growth rate refers to the rate at which the company can increase its profits without…
Q: (a) What is the balance due on the original mortgage if 16 payments have been made? (b) What is the…
A: Loan amortization is the process of repaying debt through a series of payments. Principal and…
Q: Consider historical data showing that the average annual rate of return on the S&P 500 portfolio…
A: Standard deviation on S&P Index = 38%Current r-bill rate = 2%Return on S&P index = 2%+8%=10%
Q: Karen White wants to open a restaurant in a historic building. The property can be leased for 20…
A: Calculate the perpetuity present-value factor: This is the present value of a constant annual cash…
Q: Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental…
A: Variables in the question: Windy AcresProbabilityYearly Aftertax Cash Inflow…
Q: The stock price is $50 today with estimated annual standard deviation $8. What would be the 1% one -…
A: One effective way of evaluating potential losses for a business or investment is through the use of…
Q: A company's investment in receivables is influenced by several variables, including: 10701 3…
A: Accounts receivable is defined as an asset on a firm’s balance sheet.. It is created when a firm…
Q: Twelve years ago, Elite Elements issued a 20-year bond with a $1,000 face value and an 8 percent…
A: Compound = Semiannually = 2Time = t = (20 - 12) * 2 = 16Face Value = fv = $1000Coupon rate = c = 8 /…
Q: calculate the Net Present Value
A: The net present value examines the present value of an investment's anticipated cash inflows and…
Q: The trustees of a college have accepted a gift of $175,000, but are required to deposit it in an…
A: Here, Amount DepositedToday $1,75,000.00Interest Rate10%Compounding Period (Semi Annual)2Withdrawal…
Q: Question 9 Explain with the aid of a numerical example using the yen per dollar exchange rate…
A: The objective of this question is to understand the concept of 'carry trade' in the foreign exchange…
Q: Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to…
A: Net Present Value (NPV) = Present value of future cash flows - Initial investmentA project should be…
Q: Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two…
A: Machine AMachine BInitial cost-$22,000.00Initial cost-$20,000.00Annual maintenance cost (1-10…
Q: 1. Find the future value of a one time investment of $8,000 if the account compounds quarterly at…
A: Future value:Future value (FV) is the idea of how much an investment will be valued at a certain…
Q: Jan-31-2018 68.11 Feb-28-2018 66.2 Mar-31-2018 65.01 Apr-30-2018 58.9 May-31-2018…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: In the US, about O80%, 20% O 99%, 1% O 60%, 40% 25%, 11% of all reported merger and acquisition…
A: Merger-When two separate firms combine and become a single firm, merger is said to have taken…
Q: The Hub Store at a university in eastern Canada is considering purchasing a self-serve checkout…
A: Net present value refers to the method of capital budgeting used for estimating the viability of the…
Q: Country South Africa Botswana Ghana Kenya Malawi Mauritius Namibia Zambia Zimbabwe Beer Castle…
A: Exchange rate:The value of one currency in terms of another is referred to as the exchange rate. It…
Q: What is the best choice according to the cost comparison calculation, profit comparison calculation,…
A: Computation of Total CostTotal Cost = Variable cost (+) Fixed Cost (+) Initial…
Q: Find the present value on November 30, a 60 day, 9% note for $1600 issued October 28 if money is…
A: Notes:A financial document that describes the conditions of a loan, such as the principle amount,…
Q: The discount rate is O the interest rate commercial banks charge each other for overnight loans. the…
A: The discount rate is the interest rate the Federal Reserve charges member banks for loans from the…
Q: For each of the following annuities, calculate the future value. Note: Do not round intermediate…
A: Variables in the question: Future Value ($)Annual Payment ($)YearsInterest Rate 1790106%…
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
Step by step
Solved in 3 steps with 2 images
- The Jones Company has just completed the third year of a five-year MACRS recovery period for a piece of equipment it originally purchased for $299,000. a. What is the book value of the equipment? b. If Jones sells the equipment today for $178,000 and its tax rate is 21%, what is the after-tax cash flow from selling it? Note: Assume that the equipment is put into use in year 1. *** a. What is the book value of the equipment? The book value of the equipment after the third year is $. (Round to the nearest dollar.)DML Industries bought a new manufacturing system 3 years ago for $80,000. It is being depreciated under MACRS with a 5-year recovery period. Assume a 21% tax rate. Use the depreciation table below to calculate the book value of the machine.Easter Corporation will replace one of its assets with an updated model. The current asset was purchased two years ago at a cost of $70,000. It has been depreciated under MACRS using a five-year recovery period. The company can sell this existing asset for $30,000. The new asset is going to cost $80,000 and will also be depreciated under MACRS using a five-year recovery period. If the assumed tax rate is 40 percent on both ordinary income and capital gains, the initial investment will be equal to what amount after adjusting for taxes?
- A machine was purchased 4 years ago for $50,000. The depreciation amount each year was $10,000. The firm that owns the machine no longer has a need for it, but a buyer is now willing to pay $60,000 for it because machines of this type are no longer available. If the tax rate is 23%, what tax will be owed on the transaction? EditThe Kings Inn Resort purchased three delivery carts 5 years ago. The delivery carts initially cost $60,000 and are depreciated on a straight line basis over 10 years. The effective tax rate for the company is 40%. Part A: What is the net cash flow if they sell the used carts for $36,000? Part B: What are the net cash flows if they sell the used carts for $30,000? Part C: What is the net cash flow if they sell the used carts for $25,000Three years ago, your firm bought a new machine for $3,000. The machine was depreciated on a straight line basis over a 6 year life to a salvage value of zero. Today, your company will sell the machine for $3,000. The tax rate is 28%. What are the after tax proceeds from the sale? Answer to 2 decimals.
- IU purchased a super computer for $15,000. This computer qualifies for 5-year recovery under MACRS. Use the Table provided in lectures. IU has a tax rate of 20%. Assume that the super computer is sold for $4,000 at the end of year 4. What is the after- tax salvage value? O $2,765.21 O $1,877.00 O $3,718.40 O $2,765.34Talia's tutus bought a new sewing machine for $55000 that will be depreciated over 5 years using double-declining balance depreciation with a switch to a straight line 1. Find the appreciation charge for year 1, year 2, year 3, year 4, and year 5 2. If the sewing machine is sold after 3 years for $25000 what will be the after-tax proceeds on the sale if the firm's tax bracket is 35%Consider an asset that costs $420,000 and is depreciated straight-line to zero over a 7-year economic life. What is the after-tax salvage value if the asset is sold after 4 years for $240,000 and the corporate tax rate is 22%.
- Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $48,000 and will generate delivery revenue of $23,000 for each of the next 6 years. At the end of the 6 years, the vehicle will have a salvage value of $4,800. The tax rate is 21%. Assuming that the vehicle is depreciated using MACRS 5-year property class, and that Fink Co. uses an after-tax MARR of 7%, compute the PW and determine whether Fink Co. should purchase the new business vehicle. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. $ Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±10. Should Fink Co. purchase the new business vehicle? YesHydraJems has just replaced a set of hydraulic screens that had been in operation for 6 years with a newer screening system that cost $180,000 installed. The old system cost $140,000 and had been depreciated as a 10-year MACRS asset. Its salvage value is $10,000. What is the NINV for the new equipment? Assume a 40% tax rate. Use the rounded MACRS schedule listed below: (Note: 10-Year Depreciation Schedule: 10%, 18%, 14%, 12%, 9%, 7%, 7%, 7%, 7%, 6%, 3%)Talia’s Tutus bought a new sewing machine for $45,000 that will be depreciated over 5 years using double-declining-balance depreciation with a switch to straight-line. Required: Find the depreciation charge each year. If the sewing machine is sold after 2 years for $32,000, what will be the after-tax proceeds on the sale if the firm’s tax bracket is 25%?
