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need help asap ! 7. The cost of equipment is $168,000; the useful life is 6 years. Salvage value is zero and the cost of
need help asap !
7. The cost of equipment is $168,000; the useful life is 6 years. Salvage value is zero and the cost of ca 10% and the tax rate = 30%. The present value of the tax savings resulting from the double-declinin method of depreciation is approximately (round to the nearest whole dollar): S45.976 b. S153.252 c. $50.400 d. 36.840 8. Refer to the preceding question. It Precoding question a ble to expect that the present value of the tas ting from the use of the straht-line method of depreciation a. More than the preceding result c. Equal to the preceding result b. Less than the preceding result d. Not related to the preceding result o uld be re han the of the str Pecial machine can save SI1.200 per year in cash operating expenses for the next 10 years. The cost is 4,000. No salvage value is expected. Assume the tax rate averages 2/7 of taxable income, straight-line depreciation is used, and the cost of capital -10%. The CFAT is (round to the nearest dollar): a $11,200 c. 6,800 b. $9,258 d. $4,000 10. Refer to the preceding question. The internal rate of return, using linear interpolation and rounding to two decimal places, is: a. 25.45% c. 12.34% b. 21.04% d. 16.47% 11. A machine is being considered as a capital investment. Its cost is exactly equal to the present value of the inflows promised by the machine over its useful life discounted at the company's cost of capital. If the cost of capital is 14%, then the internal rate of return (IRR) of this machine is: a. Greater than 14% c. Equal to 14% b. Less than 14% d. Cannot be determined from the given information 12. Refer to the preceding question. The net present value (NPV) of the machine must be: a. Greater than zero c. Zero b. Less than zero d. Cannot be determined from the given information 13. An assumption made by the net present value method is that: a. All cash flows occur at the beginning ofc. All cash flows ignore the time value of the period money b. All cash flows are reinvested in other d. All cash flows are reinvested in other projects that yield the internal rate of projects that yield the cost of capital return 14. You want to determine the internal rate of return of a project that generates non-equal cash flows over its life. By trial and error, you find that a discount rate of 16% yields a negative net present value, but a discount rate of 10% yields a positive net present value. The true rate of return must be: a. Greater than 16% or less than 10% c. Greater than 16% b. Less than 16% but greater than 10% d. Cannot be determined from the given informationStep by Step Solution
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