iii In real dollars, how much would Rosa pay in taxes with the new greenhouse on top of her farm's existing level of income a $23,184 b $15,870 c $17 259 d $21,960 e None of the above Enter Response Here iv Suppose that the IRS will allow Rosa to depreciate the cost of the investment using straight line over 15 years What would be the average tax rate before debt in 15 years if you also take into account the tax savings from depreciation a 23 58 b 20 87 c 1846 d 17 79 e None of the above Enter Response Here v Calculate the after tax, risk adjusted discount rate if Rosa requires a pre tax return to capital of 7 and her risk premium is 5 Use the marginal tax rate post greenhouse a 9 97 b 9 12 c 936 d 9 89 e None of the above Enter Response Here vi What is Rosa's average tax rate in year 6 Take into account her farm's initial level of income, additional income from the greenhouse, and the tax savings from depreciation and interest payments a 17 70 b 24 00 c 17 77 d 23 52 e None of the above Enter Response Here vii What is the present value of the after debt Net Cash Flows from the investment in year 10 a $9 405 b $3 941 c $4,028 d $5,813 e None of the above Enter Response Here Rosa is a produce farmer looking to invest in a new greenhouse with a hydroponic system The initial cost would be $32,500 and it is expected to increase real annual receipts by $40,300 while increasing real annual operating costs by $26,400 The initial cost would be paid with a $2,500 cash payment and a $30,000 loan fully amortized over 10 years with an interest rate of 7 The chart below is the income tax schedule, each level of income is indexed with inflation and updates annually The rate of inflation is 2 3 and Rosa's farm has a real taxable income of $82,700 before the investment i In real dollars, how much does Rosa already pay in Income taxes prior to the investment 3,$13,997 b $19 848 c $16 760 d $18,194 e None of the above Enter Response Here

Question

iii  In real dollars, how much would Rosa pay in taxes with the new greenhouse on top of her farm's existing level of income  a  $23,184 b  $15,870 c  $17 259 d  $21,960 e  None of the above Enter Response Here  iv  Suppose that the IRS will allow Rosa to depreciate the cost of the investment using straight line over 15 years  What would be the average tax rate before debt in 15 years if you also take into account the tax savings from depreciation  a  23 58  b  20 87  c  1846  d  17 79  e  None of the above Enter Response Here  v  Calculate the after tax, risk adjusted discount rate if Rosa requires a pre tax return to capital of 7  and her risk premium is 5  Use the marginal tax rate post greenhouse  a  9 97  b  9 12  c  936  d  9 89  e  None of the above Enter Response Here  vi  What is Rosa's average tax rate in year 6   Take into account her farm's initial level of income, additional income from the greenhouse, and the tax savings from depreciation and interest payments  a  17 70  b  24 00  c  17 77  d  23 52  e  None of the above Enter Response Here  vii  What is the present value of the after debt Net Cash Flows from the investment in year 10   a  $9 405 b  $3 941 c  $4,028 d  $5,813 e  None of the above Enter Response Here  Rosa is a produce farmer looking to invest in a new greenhouse with a hydroponic system  The initial cost would be $32,500 and it is expected to increase real annual receipts by $40,300 while increasing real annual operating costs by $26,400  The initial cost would be paid with a $2,500 cash payment and a $30,000 loan fully amortized over 10 years with an interest rate of 7   The chart below is the income tax schedule, each level of income is indexed with inflation and updates annually  The rate of inflation is 2 3  and Rosa's farm has a real taxable income of $82,700 before the investment  i  In real dollars, how much does Rosa already pay in Income taxes prior to the investment  3,$13,997 b  $19 848 c  $16 760 d  $18,194 e  None of the above Enter Response Here

Accepted Answer

The Answer is in the image, click to view ...

Question

iii. In real dollars, how much would Rosa pay in taxes with the new greenhouse on top of her farm's existing level of income? a.

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

Management Fundamentals

Students also viewed these General Management questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question