Question
Question 11 pts A company is considering investing in expanding its manufacturing facility. The total cost of the expansion will be $1,500,000, of which $400,000
Question 11 pts
A company is considering investing in expanding its manufacturing facility. The total cost of the expansion will be $1,500,000, of which $400,000 will be in depreciable assets. The company's tax rate is 35% and the company uses the 5 year MACRS depreciation table (below). If the company expects $400,000 in incremental EBDT in year 1, calculate its cash flow for year 1 (to be used in capital budgeting analyses).
MACRS 5 year Table | |
Year 1 | 0.2 |
Year 2 | 0.32 |
Year 3 | 0.192 |
Year 4 | 0.115 |
Year 5 | 0.115 |
Year 6 | 0.058 |
Group of answer choices
$288,000.00
$208,000.00
$80,000.00
$112,000.00
Flag question: Question 2Question 21 pts
A company sells an old machine for $250,000. The machine had a book value of $185,000. The company's tax rate is 35%. What is the tax liability (or credit) resulting from the sale of the old machine?
Group of answer choices
$22,750 Tax Credit
$22,750 Tax Liability (owe)
$185,000 Tax Liability (owe)
$65,000 Tax Liability (owe)
Flag question: Question 3Question 31 pts
A company decides to invest in replacing an old machine. The company buys a new machine for $125000. It sells the old machine for $25,000. The old machine had a book value of $30,000 at the time it was sold. The company's tax rate is 35%. What is the net cost of the investment in the new machine (to be used in capital budgeting analysis)?
Group of answer choices
$25,000.00
$98,250.00
$125,000.00
$100,000.00
Flag question: Question 4Question 41 pts
A company is considering investing in expanding its factory. The total cost of the expansion will be $300,000, of which $80,000 will be in depreciable assets. The company's tax rate is 35% and the company uses the 5 year MACRS depreciation table (below). If the company expects $75,000 in incremental EBDT in year 1, calculate its cash flow for year 1 (to be used in capital budgeting analyses).
MACRS 5 year Table | |
Year 1 | 0.2 |
Year 2 | 0.32 |
Year 3 | 0.192 |
Year 4 | 0.115 |
Year 5 | 0.115 |
Year 6 | 0.058 |
Group of answer choices
$38,350.00
$54,350.00
$16,000.00
$59,000.00
Flag question: Question 5Question 51 pts
A company will invest in an addition to its assembly plant. The investment has a total cost of $25,,000,000 of which the total depreciable assets cost $12,575,000. Based on the 5 year MACRS depreciation schedule below, calculate the amount of depreciation associated with this investment in year 1.
MACRS 5 year Table | |
Year 1 | 0.2 |
Year 2 | 0.32 |
Year 3 | 0.192 |
Year 4 | 0.115 |
Year 5 | 0.115 |
Year 6 | 0.058 |
Group of answer choices
$2,515,000.00
$5,000,000.00
$2,414,400.00
$4,024,000.00
Flag question: Question 6Question 61 pts
A machine has a cost of $175,000. Based on the 5 year MACRS depreciation schedule below, calculate the amount of depreciation for this machine in year 5.
MACRS 5 year Table | |
Year 1 | 0.2 |
Year 2 | 0.32 |
Year 3 | 0.192 |
Year 4 | 0.115 |
Year 5 | 0.115 |
Year 6 | 0.058 |
Group of answer choices
$20,125.00
$56,000.00
$35,000.00
$10,150.00
Flag question: Question 7Question 71 pts
A company is considering investing in expanding its factory. The total cost of the expansion will be $1,500,000, of which $600,000 will be in depreciable assets. The company's tax rate is 35% and the company uses the 5 year MACRS depreciation table (below). If the company expects $400,000 in incremental EBDT in year 1, calculate its cash flow for year 1 (to be used in capital budgeting analyses).
MACRS 5 year Table | |
Year 1 | 0.2 |
Year 2 | 0.32 |
Year 3 | 0.192 |
Year 4 | 0.115 |
Year 5 | 0.115 |
Year 6 | 0.058 |
Group of answer choices
$182,000.00
$280,000.00
$302,000.00
$400,000.00
Flag question: Question 8Question 81 pts
A company sells an old machine for $50,000. The machine had a book value of $60,000. The company's tax rate is 35%. What is the tax liability (or credit) resulting from the sale of the old machine?
Group of answer choices
$3,500 Tax Liability (owe)
$3,500 Tax Credit
$10,000 Tax Credit
$60,000 Tax liability (owe)
Flag question: Question 9Question 91 pts
A company will invest in an addition to its headquarters. The investment has a total cost of $1,235,000 of which the total depreciable assets cost $55,000. Based on the 5 year MACRS depreciation schedule below, calculate the amount of depreciation associated with this investment in year 5.
MACRS 5 year Table | |
Year 1 | 0.2 |
Year 2 | 0.32 |
Year 3 | 0.192 |
Year 4 | 0.115 |
Year 5 | 0.115 |
Year 6 | 0.058 |
Group of answer choices
$11,000.00
$142,025.00
$10,560.00
$6,325.00
Flag question: Question 10Question 101 pts
A company sells an old machine for $55,000. The machine had a book value of $32,000. The company's tax rate is 35%. What is the tax liability (or credit) resulting from the sale of the old machine?
Group of answer choices
$8,050 tax credit
$8,050 tax liability (owe)
$23,000 tax liability (owe)
$23,000 tax credit
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