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A company is using the combination of SL and DB depreciation we used in class to depreciate an asset over 10 years to a salvage
A company is using the combination of SL and DB depreciation we used in class to depreciate an asset over 10 years to a salvage value of $40,000. For the DB depreciation, the company is using =0.15. a. (6 pts) Assume that the book value after year 8 is $100,000. (Since we do not know the initial book value, this is an assumed number. Do not try to "reverse engineer" arriving at this value.) If we wanted to fill out a table similar to that used in class, what are the values of W,X,Y, and Z in Table 6.1? Present values to the nearest dollar, but be sure to show your work. Table 6.1. Table referenced in Problem 6a 6 b. (5 pts) In year 9 , the company has revenues of $500,000, and must pay taxes on this revenue ($500,000) minus the depreciation of the asset in the year (see Table 6.1), where the tax table is presented in Table, 6.2 . Table 6.2. Tax table to be used for Problem 6b (Note: these are not real brackets and rates: thev are modified to make calculations slightlv easier What taxes must the company pay in year 9 ? Present your answer to the nearest dollar
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