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I need the answers fast please. I will leave a like. Daily Enterprises is purchasing a $9.8 millian machine. It wit cost $55,000 vo transport
I need the answers fast please. I will leave a like.
Daily Enterprises is purchasing a $9.8 millian machine. It wit cost $55,000 vo transport and install the machine. The machine has a depreciable iffo of 5 yoars, ia using straight-line deprectation, and wili heve no salvege valis. The machine will generate incremental revenues of $4.3 milition per year along with incremental costs of $1.12 milison per yoar. Dalily marginal tax rate is 21%. You are forecesting incremental free cash flows for Daily Enterprises. a. If Dally Enteprises decides to use MACRS instend of straight-line depreciation, how would the incremental tree cash flows nssociated wath the new machine chango? b. Undes the TC.JA of 2017 . Daly Enterprises has the opson to trike 100% "Bonus" depreciation in the year in which the equipment is put into use. This means that in that year, it would take the full depreciatian experse equivalent to the cost of buying the equipment If Daily does so, which cash fow would incresse and which would decresse? How does this compare to MACRS? The incremental cosh fows would increase in years 0 and 1, as the accoleraled depreciation schedule would gre Daly Enterprises a higher tax atield during those two yairs: In years 2 through 5. the incremental tree cach flows would be lowet, since the dopeecistion expenses in these yean are lower than 20%. Overall, the prosent value of the free cash flows would nereane under a MMCRS deperedintion schedile." Is the sbove statement true or talse? Ftielect trom the drop-down monsi) depreciation expense equivalert to the coet of buyeng the equipmeet. If Daly does so, which canh flows wauld increase and which would decrnase? How does this compare to MACRS? (Belect all the chaices that apply) expense in year 0 so that the entire cost of the equpment is deducted from taxos that yeat. B. Was is taxes reduced, the incremental rash fow in year 0 ia increased. With 100% of the deprecksion expense used in yoar 0 , Dacy would have no incremental depreciation in years 1 through 6. However, by accelerating the entire tax deduction to year 0 , the present value of the incromental free cash flows would increase under bonus depreciaton in year o. Thus, again the incremental free cash tow wit te tigher in year o, but lower in yesers 1 through 5 . end the prosent volue of those cash flows wil be groator, yeer 0. Thus, again the incremental tree cash low wil be higher is yest 0 , but tower in years 1 though 5 , and the present vilue of those coeh flows wis be greater. Daily Enterprises is purchasing a $9.8 millian machine. It wit cost $55,000 vo transport and install the machine. The machine has a depreciable iffo of 5 yoars, ia using straight-line deprectation, and wili heve no salvege valis. The machine will generate incremental revenues of $4.3 milition per year along with incremental costs of $1.12 milison per yoar. Dalily marginal tax rate is 21%. You are forecesting incremental free cash flows for Daily Enterprises. a. If Dally Enteprises decides to use MACRS instend of straight-line depreciation, how would the incremental tree cash flows nssociated wath the new machine chango? b. Undes the TC.JA of 2017 . Daly Enterprises has the opson to trike 100% "Bonus" depreciation in the year in which the equipment is put into use. This means that in that year, it would take the full depreciatian experse equivalent to the cost of buying the equipment If Daily does so, which cash fow would incresse and which would decresse? How does this compare to MACRS? The incremental cosh fows would increase in years 0 and 1, as the accoleraled depreciation schedule would gre Daly Enterprises a higher tax atield during those two yairs: In years 2 through 5. the incremental tree cach flows would be lowet, since the dopeecistion expenses in these yean are lower than 20%. Overall, the prosent value of the free cash flows would nereane under a MMCRS deperedintion schedile." Is the sbove statement true or talse? Ftielect trom the drop-down monsi) depreciation expense equivalert to the coet of buyeng the equipmeet. If Daly does so, which canh flows wauld increase and which would decrnase? How does this compare to MACRS? (Belect all the chaices that apply) expense in year 0 so that the entire cost of the equpment is deducted from taxos that yeat. B. Was is taxes reduced, the incremental rash fow in year 0 ia increased. With 100% of the deprecksion expense used in yoar 0 , Dacy would have no incremental depreciation in years 1 through 6. However, by accelerating the entire tax deduction to year 0 , the present value of the incromental free cash flows would increase under bonus depreciaton in year o. Thus, again the incremental free cash tow wit te tigher in year o, but lower in yesers 1 through 5 . end the prosent volue of those cash flows wil be groator, yeer 0. Thus, again the incremental tree cash low wil be higher is yest 0 , but tower in years 1 though 5 , and the present vilue of those coeh flows wis be greater Step by Step Solution
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