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Question 8 1 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
Question 8 1 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 O $280,000.00 O $182,000.00 O $302,000.00 0 $400,000.00 Question 9 1 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? O $22.750 Tax Credit O $22,750 Tax Liability (owe) O $185,000 Tax Liability (owe) O $65,000 Tax Liability (owe) Question 10 1 pts A company will invest in an addition to its factory. The investment has a total cost of $235,000 of which the total depreciable assets cost $125,000. Based on the 5 year MACRS depreciation schedule below, calculate the amount of depreciation associated with this investment in year 3. 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 O $40,000.00 $45,120.00 $24,000.00 $14,375.00
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