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Q6. Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 35%, answer the following
Q6.
Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 35%, answer the following true/false questions.
Alt. A | Alt.B | |
Basis, $ | 150,000 | 225,,000 |
Gross Income (GI), $ | 100,000 | 100,000 |
Operating Expense (OE), $ | 30,000 | 10,000 |
Salvage Value, $ | 15,000 | 22,500 |
MARCS Depreciation Method | ADS-6: Years Recovery Period | GDS: 5-Years Recovery Period |
The book value (BV) of Alt. B at the end of year 3 is between $40,000-$45,000.
Group of answer choices
True
False
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