2. Suppose that an asset with a cost basis of $100,000 and an ADS recovery period of five yearsis being depreciated under the Alternate Depreciation System (ADS) of MACRS, as follows:Year23456Depreciation$10,000$20,000S20,000S20,000$20,000$10,000DeductionIf the firm's effective income tax rate remains constant at 30% during this six-year period, whatis the PW of after-tax savings resulting from depreciation when MARR = 15% per year (aftertaxes)?%3D

Answered: Image /qna-images/answer/858b3f0b-a97b-49bc-83bb-b492a3e02179.jpg

Answered: 2. Suppose that an asset with a cost…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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An asset having a useful life of 3 years is purchased on 1 January 2015. Cost of the asset is RO 2,000 whereas its residual value is RO 500. Using the Straight Line Method of Depreciation, the book value at the end of second year is _______. a. RO 2000 b. RO 500 c. RO 1000 d. RO 1500
Use the basic equation for the capital asset pricing model (CAPM) to Find the risk-free rate for a firm with a required return of 15% and a beta of 1.25 when the market return is 14%
Two pumps capable of delivering 100 hp to an agricultural application are being evaluated in a present economy study. The selected pump will only be utilized for one year, and it will have no market value at the end of the year. Pertinent data are summarized as given follows. If electric power costs $0.10 per kWh and the pump will be operated 4,000 hours per year, which pump should be chosen? Recall that 1 hp = 0.746 kW.
23) Assume total sales of $800000, total variable costs of $400000, and total fixed costs of $300000. Of these amounts $200000 of the variable costs are product costs, and $100000 of the fixed costs are period costs. What is the degree of operating leverage? 2.00 8.00 4.00 0.25
Suppose that a new car costs $10,000 and that the annualoperating cost and resale value of the car are as shown inTable 13. If I have a new car now, determine a replacementpolicy that minimizes the net cost of owning and operatinga car for the next six years. Age of Car Resale Operating(Years) Value ($) Cost ($)1 7,000 300 (year 1)2 6,000 500 (year 2)3 4,000 800 (year 3)4 3,000 1,200 (year 4)5 2,000 1,600 (year 5)6 1,000 2,200 (year 6)
Suppose that the index model for two Canadian stocks HD and ML is estimated with the following results: RHD =-0.03+2.10RM+eHD R-squared =0.7 RML =0.06+1.60RM+eML R-squared =0.6 σM =0.15 where M is S&P/TSX Comp Index and RX is the excess return of stock X. For portfolio P with investment proportion of 0.4 in HD and 0.6 in ML, calculate the systematic risk, non-systematic risk, and total risk of P.
Suppose that JB Cos. has a capital structure of 78 percent equity, 22 percent debt, and that its before-tax cost of debt is 13 percent while its cost of equity is 17 percent. Assume the appropriate weighted-average tax rate is 21 percent and JB estimates that they can make full use of the interest tax shield. What will be JB's WACC? (Round your answer to 2 decimal places.
Suppose that an account is governed by a quadratic accumulation function a(t) =at2 + 0.01t + b and i1 = 2%. Find a, b, the effective rate of interest on the third year, andthe effective rate of discount on the fourth year.
Suppose you have inherited K100,000 from your father-in-law that can be invested in a combination of only two stock portfolios, with the maximum investment allowed in either portfolio set at K75,000 . The first portfolio has an average rate of return of 10%, whereas the second has 20%. In terms of risk factors associated with these portfolios, the first has a risk rating of 4 (on a scale 0 to 10), and the second has 9. Since you wish to maximize your return, you will not accept an average rate of return below 12% or risk factor above 6. Formulate the linear programming model for the problem. How much should you invest in each portfolio? Solve the problem by simplex method.
A car dealership wants to try out a new leasing arrangement, which will allow a buyer to trade a car back to the dealership for a certain amount of credit at any time throughout the first five years of ownership. For a car in good condition, the arrangement will value the car at 1/5 the original price at the end of five years, and will depreciate the value of the car linearly over the course of the five years. What is the value of a car with initial purchase price P at the end of the third year? Write your answer as an expression in terms of P. Write the exact answer. Do not round.
A car dealership wants to try out a new leasing arrangement, which will allow a buyer to trade a car back to the dealership for a certain amount of credit at any time throughout the first four years of ownership. For a car in good condition, the arrangement will value the car at 1/4 the original price at the end of four years, and will depreciate the value of the car linearly over the course of the four years. What is the value of a car with initial purchase price P at the end of the third year? Write your answer as an expression in terms of P. Write the exact answer. Do not round.
Suppose that you would like to create composite indexes from three stocks: stk1, stk2, stk3. Their stock prices (Pt) and total shares outstanding (Qt) from day 0 to day 1 are shown as follows: stk3 splits two-for-one in day 1. P0 Q0 P1 Q1 stk1 40 250 50 250 stk2 50 100 50 100 stk3 60 150 50 300 Which answer is the closest value to the rate of return on a price-weighted index of the three stocks? A. 20% B. 25% C. 30% D. 35%

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