Question
Cost recovery. Richardses' Tree Farm, Inc. purchased a new aerial tree trimmer for $82,000. It is classified in the property class category of a single-purpose
Cost recovery. Richardses' Tree Farm, Inc. purchased a new aerial tree trimmer for $82,000. It is classified in the property class category of a single-purpose agricultural and horticultural structure. Then the company sold the tree trimmer after four years of service. If a seven-year life and MACRS, was used for the depreciation schedule, what is the after-tax cash flow from the sale of the trimmer (use a 35% tax rate) if
a) the sales price was $30,000
b) the sales price was $25,616.80
c) the sales price was $22,000
If the sales price is a) $30,000 or b)$25,616.80 or c)$22,000 what is the after-tax cash flow?
MACRS Fixed Annual Expense Percentages by Recovery Class
Year | 3-Year | 5-Year | 7-Year | 10-Year |
|
1 | 33.33% | 20.00% | 14.29% | 10.00% | |
2 | 44.45% | 32.00% | 24.49% | 18.00% | |
3 | 14.81% | 19.20% | 17.49% | 14.40% | |
4 | 7.41% | 11.52% | 12.49% | 11.52% | |
5 | 11.52% | 8.93% | 9.22% | ||
6 | 5.76% | 8.93% | 7.37% | ||
7 | 8.93% | 6.55% | |||
8 | 4.45% | 6.55% | |||
9 | 6.55% | ||||
10 | 6.55% | ||||
11 | 3.28% |
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