Question
Cost recovery. Richardses' Tree Farm, Inc. purchased a new aerial tree trimmer for $93,000. 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 $93,000. 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 $36,000?
b.the sales price was $29,053.20?
c.the sales price was $20,000?
MACRS Fixed Annual Expense Percentages by Recovery Class
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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% |
help me with all three parts
a.If the sales price is $36,000, what is the after-tax cash flow?
(Round to the nearest cent.)
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