Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

no excel plez 7 (25pt) An asset was acquired by Dave company with the following values: First cost= $100000, depreciable life=3 years, and an estimated

no excel plez

image text in transcribed
7 (25pt) An asset was acquired by Dave company with the following values: First cost= $100000, depreciable life=3 years, and an estimated salvage value of $20000. Initial investment is borrowed at 10% per year with repayment of an equal uniform amounts at the end of each year in 3 years. Expected gross income and expenses are $50000 and $10000 at year 1, respectively and both increase by $2500 per year subsequently. The asset is actually salvaged after 3 years for $125000. A) (4 pts) What will be the size of each payment for the $100000 debt? How much of each payment is interest and how much of each payment is principal (i.e., towards the $100000 debt)? year Payment/yr Interest/yr Principal Payment/yr Remaining principal balance 0 2 3 B) (3 pts) Calculate depreciation using double declining balance method (i.e., d=2/N) BV(t) D(t 0 3 c) (16 pts) Fill in all the blank cells in the below table. Show all the calculations for all gray cells to receive full credit. Te=40% t P S GI E CFBT BV D CG CL DR TI T CFAT 2 3 Disposal Analysis: CG(3)= DR(3)= CL(3)= Please show your work in details for the following: E(1)= CFBT(1)= CFBT(3)= TI(3)= T(3)= CFAT(3)= C) (2 pts). Assuming a MARR of 10%, determine if it is a good investment on an after-tax basis CFBT(t)=GI(t)-E(t)-P(t)+S(t), CG(t)=max(0, S(t)-FC), TI(t)=GI(t)-E(t)-D(t)+DR(t)+CG(t)-CL(t) CL(t)= max(0, BV(t)-S(t)), T(t)=TI (t) (Te), DR(t)= max(0, min(S(t),FC)-BV(t)) CFAT(t)=CFBT(t)-T(t)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Local Disaster Resilience Administrative And Political Perspectives

Authors: Ellen Russell, Ashley D Ross

1st Edition

1135910618, 9781135910617

More Books

Students also viewed these Economics questions