Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can you showed youw rok on paper please thank you. A new hydraulic excavator was purchased by a construction company for $200,000 with annual benefits

can you showed youw rok on paper please thank you. image text in transcribed
A new hydraulic excavator was purchased by a construction company for $200,000 with annual benefits before taxes in each of the 5 years of operation as given below (BTCF). The assct is depreciated using a DDB depreciation method to a salvage value that was estimated to be $50,000. At the end of year 5, however, the hydraulic excavator was actually sold for $70,000. The construction company is subject to a corporate tax rate of 30% and a 15% capital gain tax. It also uses a MARR of 12% to evaluate investments of this kind. a) (5 pts) Calculate the after-tax cash flow (ATCH) for this investment and fill out all missing values in the tables below. Show your work for all steps. BTCF Depreciation D Taxable Income Taxes ATCF + 0 $200,000 1 $75,000 2 3 $80,000 $54,000 $32,000 5 $32,000 in Using a separate table for the DDB depreciation calculation might be belpful: D. BV 0 t 1 2 3 4 5

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_2

Step: 3

blur-text-image_3

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

Digging For Disclosure Tactics For Protecting Your Firms Assets From Swindlers, Scammers, And Imposters

Authors: Kenneth S. Springer, Joelle Scott

1st Edition

0131385569, 9780131385566

More Books

Students also viewed these Accounting questions