Question
A. Expo Restaurant is considering the purchase of a $4,500,000 flat top grill.The grill has an economic life of 6years and will be fully depreciated
A. Expo Restaurant is considering the purchase of a $4,500,000 flat top grill.The grill has an economic life of 6years and will be fully depreciated using the straight-line method.The grill is expected to produce 250,000 tacos per year for the next 6years, with each costing $2to make and priced at $6.Assume the discount rate is 7% and the tax rate is 21%. The restaurant expects the market value of the grill to be $600,000,6years from now.
Calculate the book value of the grill at the end of year 4. (Round to 2 decimals)
B. ExpoRestaurant is considering the purchase of a$4,500,000flat top grill.The grill has an economic life of 6years and will be fully depreciated using the straight-line method.The grill is expected to produce 250,000tacos per year for the next 6years,with each costing$2to make and priced at$6.Assume the discount rate is 7%and the tax rate is21%.The restaurant expects the market value of the grill tobe$600,000,6yearsfrom now.
Calculate the annual depreciation value for the grill. (Round to 2 decimals)
C. ExpoRestaurant is considering the purchase of a$4,500,000flat top grill.The grill has an economic life of 6years and will be fully depreciated using the straight-line method.The grill is expected to produce 250,000tacos per year for the next 6years,with each costing$2to make and priced at$6.Assume the discount rate is 7%and the tax rate is21%.The restaurant expects the market value of the grill tobe$600,000,6yearsfrom now.
Calculate the after-tax salvage value at the end of year 6. (Round to 2 decimals)
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