Question
PLEASE TYPE IT OUT DO NOT WRITE IT OUT. Step by step using a financial calculator 1D) You just purchased some equipment that is classified
You just purchased some equipment that is classified as 5-year property for MACRS. The equipment cost $183,000. What will the book value of this equipment be at the end of 4 years should you decide to resell the equipment at that point in time? Do not include the $ sign, and round it to a whole dollar.
MACRS 5-year property
Year | Rate |
1 | 20.00% |
2 | 32.00% |
3 | 19.20% |
4 | 11.52% |
5 | 11.52% |
6 | 5.76% |
The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $276,000 and cash expenses by $135,000. The initial investment will require $101,000 in fixed assets that will be depreciated using the 5-year MACRS. The company has a marginal tax rate of 34 percent. What is the project OCF in year 2? (Do not include the dollar sign ($). Round your answer to a whole dollar. (e.g., 4,132)
MACRS 5-year property | |
Year | Rate |
1 | 20.00% |
2 | 32.00% |
3 | 19.20% |
4 | 11.52% |
5 | 11.52% |
6 | 5.76% |
Crafter's Supply purchased some fixed assets 3 years ago at a cost of $49,000. It no longer needs these assets so it is going to sell them today for $25,000. The assets are classified as 5-year property for MACRS. What is the after-tax cash flow from this sale if the firm's tax rate is 28 percent? Do not include the dollar sign ($). Round your answer to a whole dollar. (e.g., 4,132)
MACRS 5-year property | |
Year | Rate |
1 | 20.00% |
2 | 32.00% |
3 | 19.20% |
4 | 11.52% |
5 | 11.52% |
6 | 5.76% |
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