Homework:Chapter 10 Homework

Question 6, P10-10 (similar to)

Part 1 of 3

HW Score: 50%, 4 of 8 points

Points: 0 of 1

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Cost recovery. Richardses' Tree Farm, Inc. purchased a new aerial tree trimmer for

$94,000.

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,

LOADING...

, was used for the depreciation schedule, what is the after-tax cash flow from the sale of the trimmer (use a

40%

tax rate) ifa.the sales price was

$36,000?

b.the sales price was

$29,365.60?

c.the sales price was

$19,000?

a.If the sales price is

$36,000,

what is the after-tax cash flow?

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%