e) In incremental analysis, if AB AC 1, the increment of investment is not desirable 2) MCQ 5 4 a An income producing asset of cost basis 120,000 is being depreciated with 150 declining balance assuming the life of the asset is 5 years Determine the BV after 2 years i) 76,800 ii) 43,200 iii) 58,800 iv) 61,200 (select nearest whole numb b An automated inspection system purchased at a cost of 80,000 which is a 3 year MACRS pro class 1st year a bonus 30 was claimed The system is sold after 3 years with 20,000, the BC value after 2 years i) 12,450 ii) 17,780 iii) 43,560 iv) 67,556 c A company has $200K available fund to invest The 5 projects are as below with initial cost expected IRR Which combination is the best choice Projects 1 2 3 4 5 IRR 14 15 6 18 Required Investment 20K 50K 60K 15 8 90K 18 5 90K 1,4 and 5 ii)2,4and 5 iii) 2,3 and 5 iv) 2,3 and 4 State tax 9 6 , Fed tax is 21 Revenue 800,000, Expense 200,000 Depreciation 12 federal tax is (put in thousands) 800,000 200,000 er investing some money for some years you earn 10,600 (future value) If the int ra could get 10, 396 and if it was 8 you could get 11,000 What interest you got 34 ii) 6 68 iii)7 32 iv)6 66

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e) In incremental analysis, if AB/AC <1, the increment of investment is not desirable 2).. MCQ 5*4 a. An income producing asset of cost

e) In incremental analysis, if AB/AC

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