please solve all tables below and show all formulas

5 verNQOrOrac nd can be hidden to make printable region cover a 10-year project life Problem 12-26: $120,000 capital cost: 40% Bonus Deprec: 5-year Property Class: 22% combined tax rate $32 000 anal cash flow SVI5Y-SAN OD: MARR-12% MACRS Depreciation Rates 0 1 2 3 4 5 6 7 8 9 10 3-Year Property Class & Rates 3 0.3333 0.4444 0.1481 0.0741 5-year Property Class & Rates 5 0 2000 OK100 0.1920 0.1152 0.1152 0.0576 7-year Property Class & Rates 7 0.1429 0.2449 0.1749 0.1249 0.0892 0.0892 0.0392 0.0446 10-year Property Class & Rates 10 0.1000 0.1800 0.1440 0.1152 0.0922 0.0737 0.0655 0.0655 0.0655 0.0655 15-year Property Class Rate 15 0.0500 0.0950 0.0055 0.0770 0.0693 0.0623 00590 0.0590 0.0602 0.0602 20-year Property Class & Rates 0.0375 0.07220.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0446 0.0446 0 0 10 11 12 13 14 15 16 17 18 19 2n 21 22 23 24 25 26 27 28 29 an 31 Depreciation Expense & EOY Book Value Initial Capital Cost Bonus Depreciation Cost Basis MACRS Depreciation Expense Note: use 50% of MACRS rate in year of sale End-of-Year Book Value 18) 1 40000 Asset Disposal (Assuming no capital gains) SV (Selling Price) EOY Book Value Ordinary Income Gain Loss nly 24 35 36 37 28 an 41 42 43 44 45 16 - 6789BHV 0.12 0 2 4 ah 0 0 0 0 10 11 12 13 14 15 16 17 18 19 orksheets 20 Orksheet 21 (20) 22 23 24 25 26 27 28 29 30 29) - (26) 31 32 -C26 33 34 35 36 37 38 Problem 12-26: $120,000 capital cost: 40% Bonus Deprec; 5-year Property Class; 22% combined tax rate: $32.000 annual cash flow. MARR=12% Combined Marginal Tax Rate State Income Tax Rate (s) Federal Income Tax Rate (0) Combined Tax Rate (s + f(1-s)] 0.22 MARR INCOME TAX CALCULATION 1 3 Sales Revenue Cash Expenses Tax-Related Cash Flow 32000 Depreciation & Depletion Deduction Ordinary Gains/Losses (SV-BV) Taxable income Income Taxes Income after Taxes AFTER TAX CASH FLOW CALCULATION 5 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 Was Investment Satisfactory? 0 2 3 4 12-26 A mining corporation purchased $120,000 of production machinery and depreciated it using 40% bonus depreciation with the balance using 5-year MACRS depreciation, a 5-year depreciable life, and zero salvage value. The corporation is a profitable one that has a 22% combined incremental tax rate. At the end of 5 years the mining company changed its method of operation and sold the production machinery for $40,000. During the 5 years the machinery was used, it reduced mine operating costs by $32,000 a year, before taxes. If the company MARR is 12% after taxes, was the investment in the machinery a satisfactory one? Determine whether the investment in the machinery a satisfactory one if the company MARR is 12% after taxes: Step 1: Calculate profit after tax for 1st year. Particulars Amount ($) 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 + 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] +($2,00030%) = $31,000+ $6,000 = $37,000 Step 7: Calculate NPV. $48,000 $21,000 -$120,000+ 1.05 1.052 NPV = $21,000 $21,000 $37,000 1.05 1.054 1.05 [-$120,000+ $45,714.29 + $19,047.62 + $18,139.8+$17,276.75+$28,990.47 = $9,163.4 As NPV $9,163.4 is positive so the investment in the machinery is the satisfactory one. 2+ 2)+ = 5 verNQOrOrac nd can be hidden to make printable region cover a 10-year project life Problem 12-26: $120,000 capital cost: 40% Bonus Deprec: 5-year Property Class: 22% combined tax rate $32 000 anal cash flow SVI5Y-SAN OD: MARR-12% MACRS Depreciation Rates 0 1 2 3 4 5 6 7 8 9 10 3-Year Property Class & Rates 3 0.3333 0.4444 0.1481 0.0741 5-year Property Class & Rates 5 0 2000 OK100 0.1920 0.1152 0.1152 0.0576 7-year Property Class & Rates 7 0.1429 0.2449 0.1749 0.1249 0.0892 0.0892 0.0392 0.0446 10-year Property Class & Rates 10 0.1000 0.1800 0.1440 0.1152 0.0922 0.0737 0.0655 0.0655 0.0655 0.0655 15-year Property Class Rate 15 0.0500 0.0950 0.0055 0.0770 0.0693 0.0623 00590 0.0590 0.0602 0.0602 20-year Property Class & Rates 0.0375 0.07220.0668 0.0618 0.0571 0.0528 0.0489 0.0452 0.0446 0.0446 0 0 10 11 12 13 14 15 16 17 18 19 2n 21 22 23 24 25 26 27 28 29 an 31 Depreciation Expense & EOY Book Value Initial Capital Cost Bonus Depreciation Cost Basis MACRS Depreciation Expense Note: use 50% of MACRS rate in year of sale End-of-Year Book Value 18) 1 40000 Asset Disposal (Assuming no capital gains) SV (Selling Price) EOY Book Value Ordinary Income Gain Loss nly 24 35 36 37 28 an 41 42 43 44 45 16 - 6789BHV 0.12 0 2 4 ah 0 0 0 0 10 11 12 13 14 15 16 17 18 19 orksheets 20 Orksheet 21 (20) 22 23 24 25 26 27 28 29 30 29) - (26) 31 32 -C26 33 34 35 36 37 38 Problem 12-26: $120,000 capital cost: 40% Bonus Deprec; 5-year Property Class; 22% combined tax rate: $32.000 annual cash flow. MARR=12% Combined Marginal Tax Rate State Income Tax Rate (s) Federal Income Tax Rate (0) Combined Tax Rate (s + f(1-s)] 0.22 MARR INCOME TAX CALCULATION 1 3 Sales Revenue Cash Expenses Tax-Related Cash Flow 32000 Depreciation & Depletion Deduction Ordinary Gains/Losses (SV-BV) Taxable income Income Taxes Income after Taxes AFTER TAX CASH FLOW CALCULATION 5 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 Was Investment Satisfactory? 0 2 3 4 12-26 A mining corporation purchased $120,000 of production machinery and depreciated it using 40% bonus depreciation with the balance using 5-year MACRS depreciation, a 5-year depreciable life, and zero salvage value. The corporation is a profitable one that has a 22% combined incremental tax rate. At the end of 5 years the mining company changed its method of operation and sold the production machinery for $40,000. During the 5 years the machinery was used, it reduced mine operating costs by $32,000 a year, before taxes. If the company MARR is 12% after taxes, was the investment in the machinery a satisfactory one? Determine whether the investment in the machinery a satisfactory one if the company MARR is 12% after taxes: Step 1: Calculate profit after tax for 1st year. Particulars Amount ($) 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 + 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] +($2,00030%) = $31,000+ $6,000 = $37,000 Step 7: Calculate NPV. $48,000 $21,000 -$120,000+ 1.05 1.052 NPV = $21,000 $21,000 $37,000 1.05 1.054 1.05 [-$120,000+ $45,714.29 + $19,047.62 + $18,139.8+$17,276.75+$28,990.47 = $9,163.4 As NPV $9,163.4 is positive so the investment in the machinery is the satisfactory one. 2+ 2)+ =