Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the following data for Questions 37 and 38 Jimbo's Demolotion Service has a wrecking ball apparatus that it purchased 3 years ago for $100,000.

image text in transcribed
image text in transcribed
image text in transcribed
Use the following data for Questions 37 and 38 Jimbo's Demolotion Service has a wrecking ball apparatus that it purchased 3 years ago for $100,000. It is currently being used in a project that is in the final year of its 3 year lifespan that started the year the wrecking ball was purchased. The company plans to depreciate the wrecking ball straight- line to zero over its anticipated 5 year life. However, a competitor has made an offer to but the wrecking ball from the company at the end of the project (the end of Year 3) for $60,000. The company has accepted the offer. Assuming a 21% tax rate, no recovery of Net Working Capital at the end of the project, no other sales of equipment at the end of the project, and annual Operating Cash Flow of $400,000. Question 37: What is the annual amount of the depreciation charge on the wrecking ball? Multiple Choice $33,333 O $20,000 $10,000 $66,667 $16,667 Question 38: What is the amount of the Total Cash Flow for Year 3 of the project? Multiple Choice O $447,900 O S460,000 O $410,000 $352,100 O $452,100

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

Personal Finance

Authors: E. Thomas Garman, Raymond Forgue

9th Edition

0618938737, 978-0618938735

More Books

Students also viewed these Finance questions

Question

Develop successful mentoring programs. page 418

Answered: 1 week ago