Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A project requires $16,543 of equipment that is classified as a 7-year property. What is the depreciation expense in Year 3 given the following MACRS

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
A project requires $16,543 of equipment that is classified as a 7-year property. What is the depreciation expense in Year 3 given the following MACRS depreciation allowances, starting with year one: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box A company is selling an equipment after two years for $3,222. The equipment was originally purchased for $97,681. The tax rate is 22%. The equipment is classified as a 5-year property. What is the after-tax salvage value? The MACRS allowance percentages are as follows, starting with Year 1: 20.00, 32.00, 19:20, 11.52. 11.52, and 5.76 percent. Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. Six years ago, ABC Company invested $50,470 in a new machinery. The investment in net working capital was $3,373 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $22,854. Today, the book value of the machinery is $17,528. The tax rate is 29 percent. What are the terminal cash flows in Year 6? Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box A project has an initial outlay of $1,593. The project will generate annual cash flows of $736 over the 5-year life of the project and terminal cash flows of $302 in the last year of the project. If the required rate of return on the project is 3%, what is the net present value (NPV) of the project? Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. XYZ is considering a 3-yr project. The initial outlay is -$120,000, annual cash flow is $50,000 and the terminal cash flow is $10,000. The required rate of return (cost of capital) is 15%. The net present value is $736,42. What if the required rate of return is 11% instead? Re-calculate the NPV

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

A Reformulation Of Keynesian Economics

Authors: Jagdish Handa

1st Edition

9814616095,9814616117

More Books

Students also viewed these Finance questions

Question

What is Working Capital ? Explain its types.

Answered: 1 week ago

Question

(1) An example of negative feedback that you received badly.

Answered: 1 week ago

Question

How well do you gain participation and involvement from the group?

Answered: 1 week ago

Question

Who is the client?

Answered: 1 week ago