Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ths was severely wrong can someone please retry it. Menu Tanner McMu ON b Partially correct 30.00 points out of 62.00 Flag question After-Tax Cash

Ths was severely wrong can someone please retry it. image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Menu Tanner McMu ON b Partially correct 30.00 points out of 62.00 Flag question After-Tax Cash Flows Below is a list of aspects of various capital expenditure proposals that the capital budgeting team of Modern Systems, Inc., has incorporated into its net present value analyses during the past year Unless otherwise noted, the items listed are unrelated to each other. All situations assume a 30% income tax rate and a 10% minimum desired rate of return 1. Pre-tax savings of $5,000 in cash expenses will occur in each of the next three years. 2. A machine is purchased now for $82,000. 3. Special tools costing $45,000 will be depreciated $9,000, $18,000, and $18,000, respectively, on the tax return over a three-year life 4. A patent purchased for $330,000 will be amortized on a straight-line basis over 15 years on the tax return. No salvage value is expected 5. Pre-tax savings of $8,000 in cash expenses will occur in each of the next seven years. 6. Pre-tax savings of $5,500 in cash expenses will occur in the first, fourth, and seventh years from now 7. The special tools described in aspect 3 will be sold after three years for $10,000 cash 8. A truck with a tax book value of $7,200 after two years will be sold at that time for $4,600 a. Calculate and record in column A the related after-tax cash flow effect(s) b. Indicate in column B the timing of each cash flow shown in column A. Use 0 to indicate immediately and 1, 2, 3, 4, and so on for each year involved YUNDAI

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

External Audit Auditing Business Functions And Assets

Authors: Bart Rohman

1st Edition

B0B5NR6TB6, 979-8839201767

More Books

Students also viewed these Accounting questions