Old MathJax webview

Old MathJax webview

please solve all the tables below and show all formulas used. thanks

problems Property Class 10 years, raw augmentation d multiple equipment purchases &> 1 property class be hidden to make printable region cover a 10-year project life Problem 12-36: Capital cost-$250,000; 7 year Property Class: revenue/yr $80,000: costs/yr $10,000, SVISS=$75 ODD: MARR=12% combiner tax rate 23% MACRS Depreciation Rates 0 2 3 4 5 6 7 8 9 10 3-Year Property Class & Rates 0.3333 0.4444 0.1481 0.0741 5-year Property Class & Rates 5 0.2000 0.32000.1920 0.1152 0.1152 0.0576 7-year Property Class & Rates 7 0.1429 0.2449 0.1749 0.1249 0.0892 0.0892 0.0892 0.0446 10-vear Property Class & Rates 10 0.100 0.1800 0.1440 0.1152 0.0922 0.0737 0.0655 0.06550655 050655 15-year Property Class Rate 15 0.0500 0.0950 0.0855 0.07700.0693 0.0623 0.059000590 0.0602 0.0602 20-vear Property Class & Rates 20 0.0375 0.07220.0668 0.0618 0.0571 0.0528 00489 0.0452 0.04760446 3 4 5 6 7 8 9 in 11 12 13 14 15 16 17 18 10 2n 21 22 23 24 25 26 27 28 29 31 32 34 25 36 27 38. an 41 Depreciation Expense & EOY Book Value Initial Capital Cost Bonus Depreciation Cost Basis MACRS Depreciation Expense Note: se 50% of MACRS rate in year of sale End-of-Year Book Value Asset Disposal (Assuming no capital gains) SV (Selling Price) EOY Book Value Ordinary Income GarvLoss POLOCO CONOSE t Evaluation Worksheet Template culation results from the Depreciation and Depletion worksheet templates is will be needed for all problems olumn augmentation if study period 2 10 years is for reference and can be hidden to make printable region cover a 10-year project life Problem 1236: Capital cost-$250,000; 7-year Property Class: revenue/yr $80,000;costs/yr=$10,000: Sv(5) $75,000 MARR=12% combined tax rate=23% Combined Marginal Tax Rate State Income Tax Rate (s) Federal Income Tax Rate (f) Combined Tax Rate /s + f(18) MARR 12 13 14 0 2 3 4 5 INCOME TAX CALCULATION Sales Revenue Cash Expenses Tax-Related Cash Flow Depreciation & Depletion Deduction Ordinary Gains/Losses (SV-BV) Taxable income Income Taxes Income after Taxes 0 0 0 0 3 4 16 77 18 19 worksheets 20 worksheet 21 +/- (20) 221) 23 24 25 26 27 28 29 30 )-(29) - (26) 31 32 H30) C26 23 34 25 36 37 AFTER TAX CASH FLOW CALCULATION Initial Costs (Equipment, Land, Minerals) Tax-Related Cash Flow Equipment Sales (SV)-import from worksheet Income Taxes After-Tax Cash Flow (ATCF) AFTER TAX CASH FLOW PROJECT EVAL After Tax NPV After Tax IRR 12-36 Specialty Machining, Inc. bought a new multi-turret turning center for $250,000. The machine generated new revenue of $80,000 per year. Operating costs for the machine averaged $10,000 per year. Following IRS regulations, the machine was depreciated using the MACRS method, with a recovery period of 7 years. The center was sold for $75,000 after 5 years of service. The company uses an after-tax MARR rate of 12% and is in the 23% tax bracket. Determine the after-tax net present worth of this asset over the 5-year service period. Determine whether the investment in the machinery a satisfactory one if the company MARR is 12% after taxes: Step 1: Calculate profit after tax for 1st year. Particulars Amount ($) Revenue (cost saving) $40,000 Less: Operating expenses ($10,000) Less: Depreciation ($90,000 Profit before tax ($60,000) Less: Tax @30% ($18,000) Profit after tax ($42,000) = Step 2: Calculate the cash flow for 1st year. Profit after tax Cash flow for 1 year Depreciation =(-$42,000+ $90,000) = $48,000 Step 3: Calculate profit after tax for 2-4th year. Particulars Amount ($) Revenue (cost saving) $40,000 Less: Operating expenses ($10,000) Less: Depreciation $0 Profit before tax $30,000 Less: Tax @30% ($9,000) Profit after tax $21,000 Step 4: Calculate the cash flow for 2-4 year. Profit after tax + Cash flow for 2-4 year Depreciation =($21,000+ $0) = $21,000 Step 5: Calculate profit after tax for 5th year. Particulars Amount ($) Revenue (cost saving) $40,000 Less: Operating expenses ($10,000) Less: Depreciation $0 Profit before tax $30,000 Less: Tax @30% ($9,000) Profit after tax $21,000 Step 6: Calculate the cash flow for 5th year. Profit after tax + Cash flow for 5th year = Salvage value + Tax benefit =[$21,000 + $10,000] +($2,000x30%) = $31,000+ $6,000 = $37,000 = problems Property Class 10 years, raw augmentation d multiple equipment purchases &> 1 property class be hidden to make printable region cover a 10-year project life Problem 12-36: Capital cost-$250,000; 7 year Property Class: revenue/yr $80,000: costs/yr $10,000, SVISS=$75 ODD: MARR=12% combiner tax rate 23% MACRS Depreciation Rates 0 2 3 4 5 6 7 8 9 10 3-Year Property Class & Rates 0.3333 0.4444 0.1481 0.0741 5-year Property Class & Rates 5 0.2000 0.32000.1920 0.1152 0.1152 0.0576 7-year Property Class & Rates 7 0.1429 0.2449 0.1749 0.1249 0.0892 0.0892 0.0892 0.0446 10-vear Property Class & Rates 10 0.100 0.1800 0.1440 0.1152 0.0922 0.0737 0.0655 0.06550655 050655 15-year Property Class Rate 15 0.0500 0.0950 0.0855 0.07700.0693 0.0623 0.059000590 0.0602 0.0602 20-vear Property Class & Rates 20 0.0375 0.07220.0668 0.0618 0.0571 0.0528 00489 0.0452 0.04760446 3 4 5 6 7 8 9 in 11 12 13 14 15 16 17 18 10 2n 21 22 23 24 25 26 27 28 29 31 32 34 25 36 27 38. an 41 Depreciation Expense & EOY Book Value Initial Capital Cost Bonus Depreciation Cost Basis MACRS Depreciation Expense Note: se 50% of MACRS rate in year of sale End-of-Year Book Value Asset Disposal (Assuming no capital gains) SV (Selling Price) EOY Book Value Ordinary Income GarvLoss POLOCO CONOSE t Evaluation Worksheet Template culation results from the Depreciation and Depletion worksheet templates is will be needed for all problems olumn augmentation if study period 2 10 years is for reference and can be hidden to make printable region cover a 10-year project life Problem 1236: Capital cost-$250,000; 7-year Property Class: revenue/yr $80,000;costs/yr=$10,000: Sv(5) $75,000 MARR=12% combined tax rate=23% Combined Marginal Tax Rate State Income Tax Rate (s) Federal Income Tax Rate (f) Combined Tax Rate /s + f(18) MARR 12 13 14 0 2 3 4 5 INCOME TAX CALCULATION Sales Revenue Cash Expenses Tax-Related Cash Flow Depreciation & Depletion Deduction Ordinary Gains/Losses (SV-BV) Taxable income Income Taxes Income after Taxes 0 0 0 0 3 4 16 77 18 19 worksheets 20 worksheet 21 +/- (20) 221) 23 24 25 26 27 28 29 30 )-(29) - (26) 31 32 H30) C26 23 34 25 36 37 AFTER TAX CASH FLOW CALCULATION Initial Costs (Equipment, Land, Minerals) Tax-Related Cash Flow Equipment Sales (SV)-import from worksheet Income Taxes After-Tax Cash Flow (ATCF) AFTER TAX CASH FLOW PROJECT EVAL After Tax NPV After Tax IRR 12-36 Specialty Machining, Inc. bought a new multi-turret turning center for $250,000. The machine generated new revenue of $80,000 per year. Operating costs for the machine averaged $10,000 per year. Following IRS regulations, the machine was depreciated using the MACRS method, with a recovery period of 7 years. The center was sold for $75,000 after 5 years of service. The company uses an after-tax MARR rate of 12% and is in the 23% tax bracket. Determine the after-tax net present worth of this asset over the 5-year service period. Determine whether the investment in the machinery a satisfactory one if the company MARR is 12% after taxes: Step 1: Calculate profit after tax for 1st year. Particulars Amount ($) Revenue (cost saving) $40,000 Less: Operating expenses ($10,000) Less: Depreciation ($90,000 Profit before tax ($60,000) Less: Tax @30% ($18,000) Profit after tax ($42,000) = Step 2: Calculate the cash flow for 1st year. Profit after tax Cash flow for 1 year Depreciation =(-$42,000+ $90,000) = $48,000 Step 3: Calculate profit after tax for 2-4th year. Particulars Amount ($) Revenue (cost saving) $40,000 Less: Operating expenses ($10,000) Less: Depreciation $0 Profit before tax $30,000 Less: Tax @30% ($9,000) Profit after tax $21,000 Step 4: Calculate the cash flow for 2-4 year. Profit after tax + Cash flow for 2-4 year Depreciation =($21,000+ $0) = $21,000 Step 5: Calculate profit after tax for 5th year. Particulars Amount ($) Revenue (cost saving) $40,000 Less: Operating expenses ($10,000) Less: Depreciation $0 Profit before tax $30,000 Less: Tax @30% ($9,000) Profit after tax $21,000 Step 6: Calculate the cash flow for 5th year. Profit after tax + Cash flow for 5th year = Salvage value + Tax benefit =[$21,000 + $10,000] +($2,000x30%) = $31,000+ $6,000 = $37,000 =