Question
Talia's Tutus bought a new sewing machine for $55,000 that will be depreciated over 5 years using double-declining-balance depreciation with a switch to straight-line. Required:
Talia's Tutus bought a new sewing machine for $55,000 that will be depreciated over 5 years using double-declining-balance depreciation with a switch to straight-line.
Required:
a. Find the depreciation charge each year.
b. If the sewing machine is sold after 3 years for $25,000, what will be the after-tax proceeds on the sale if the firm's tax bracket is 35%?
Step by Step Solution
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Step: 1
a Cost of the machine 55000 Period 5 years Double Declining Depreciaiton Formula 2 Basic Depreciatio...
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Fundamentals of Corporate Finance
Authors: Richard Brealey, Stewart Myers, Alan Marcus
10th edition
1260566099, 1260013960, 1260703900, 978-1260566093
