A property is sold for $7,600,000 and the mortgage balance at the time of sale is $3,600,000. The property was purchased 5 years ago for $4,820,000. Annual depreciation allowances of $140,000 have been taken. The tax rate on capital gains is 15% and the tax rate on depreciation recapture is 25%. What is the after-tax cash flow to equity associated with the sale of the property?

Q: An undeveloped land in Cabanatuan City, Nueva Ecija bought by XYZ Developer Corporation for ₱450,000…

A: Hello, you have posted multiple questions. I have resolved the first question. Please repost the…

Q: A corporation expects to receive $32,000 each year for 15 years from the sale of a product. There…

A: Rate of return is the annual income in percentage earned from an investment.

Q: On October 1st, you purchased a residentialhome in which to locate your professional office…

A: a) The first question askes to find the depreciation expense for the first year that the person…

Q: A firm is investing in an equipment which falls in 5-years MACRS. The cost of the machine is…

A: Depreciation is an expense which is consider to compute cashflows from the project. It reduce the…

Q: ABC, Inc. is considering the purchase of a $116,000 piece of equipment. The equipment is classified…

A: Given, Equipment cost = $116,000 MACRS 5-year property: At year 1 Rate = 20.00% At year 2 Rate = 32%…

Q: Consider an asset that costs $665,000 and is depreciated straight-line to zero over its nine-year…

A: Calculation of after cash flow from sale of asset:The after-cash flow from sale of asset is…

Q: Engro Incorporation wants to evaluate an acquisition of an equipment worth $200,000. Its marginal…

A:

Q: A property is purchased for $600,000 and sold for $900,000. Which of the following statements is…

A: The capital gain is the difference between the sale value and the adjusted basis.

Q: A piece of equipment was purchased for $1, 200 and depreciated on a straight-line basis to $140 over…

A: Under the straight-line method of depreciation, the fixed asset is depreciated with an equal amount…

Q: You manage a real estate investment company. One year ago, the company purchased 10 parcels of land…

A: calculation of above requirement with all necessary working are as follows

Q: A. Company Y must choose between purchasing a building for OMR 861,000 or leasing the building for…

A: Present value of cost Purchase = Building price - Present value of tax benefit on depreciation

Q: Last year, Blue Lake Mines, Inc., had earnings after tax of $550,000. Included in its expenses were…

A: Given Earnings after Tax = $550,000 Depreciation = $240,000 Deferred Taxes =$110,000 Purchase of new…

Q: A company, whose earnings put it in the 25% marginal tax bracket, is considering the purchase of a…

A: Solution: The present value of cash outflow Year 0 - Purchase price (initial) = $25,000 Depreciation…

Q: Pebble Co. recently sold a used machine for P40,000. The machine had a book value of P60,000 at the…

A: Tax is financial charge or levy imposed by the government of the country to make government…

Q: Consider an asset cost 1.5 million and is depreciated straight ine to zero over its eight years tax…

A: Salvage value is the value after selling off the asset when it is no longer in service. The market…

Q: 1. Given this information, determine the value of the terminal loss or recapture at the end of the…

A: 1       Year Opening Balance Depreciation = Opening balance * 30% Closing Balance 1 1,00,000…

Q: Scallop Corporation purchased oil exploration equipment for $600,000 that will be depreciated over…

A: After-tax rate of return can be defined as the financial benefit towards the invested funds after…

Q: An asset with initial cost base of 6 million was bought 5 years ago. At the end of the current year…

A: The assets which possess a natural capability for growing or procreating themselves which lead to…

Q: A company purchases an industrial laser for $166,000. The device has a useful life of 4 years and a…

A: After tax cash flow (ATCF) = Taxable income - Tax + Depreciation

Q: Churchill Ltd. purchases an asset for $150,000. This asset qualifies as a five-year recovery asset…

A: Allocation of the cost of the asset over the useful life of that asset is term as depreciation. It…

Q: Watanabe Corporation is selling one of its assets for $1,700. The asset originally cost $10,000.  It…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Harper Corporation has the following information about the purchase of a new piece of equipment:…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: Amazing Brentwood Inc bought a long-term asset for $100,000. The asset has a 30% CCA rate. At the…

A: Depreciation means reduction in the value of an asset. Given in the question: Asset purchase value =…

Q: 9

A: Recapture depreciation is a gain to the extent of depreciation amount…

Q: The Hills Company, a calendar year company, purchased a new machine for P280,000 on January 1.…

A: Solution: Annual net income from investment = Investment amount * ARR = P280,000 * 15% = P42,000

Q: Harper Corporation recently sold a used machine for $50,000. The machine had a book value of $75,000…

A: The Loss or Gain on a machine is computed by comparing the purchase price to its Netbook value. A…

Q: Consider an asset that costs $422,400 and is depreciated straight-line to zero over its 8- year tax…

A: Given, Asset cost = $422,400 Selling Price = $52800 Tax rate = 24%

Q: An investor bought a racehorse for $1 million. The horse’s average winnings were $700,000 per year…

A: Annual pre-tax profit =$700,000-$200,000=$500,000   Annual post tax profit =$500,000-($500,000 ×…

Q: Sandhill Corporation just purchased computing equipment for $22,000. The equipment will be…

A: The term depreciation refers to the process of systematically allocating the cost of an asset over…

Q: A new piece of equipment costs $500,000, and depreciated according to the 5 year MACRS schedule.…

A: In the given question, we have to calculate the net cash inflow for which we have been given annual…

Q: Suppose Hampton Corporation sells land for $8,000,000. Hampton paid $5,000,000 for the land several…

A: After-tax cash flow is the amount that is arrived after net of taxes paid on the receipt of any…

Q: Six years ago, ABC Company invested $45,525 in a new machinery. The investment in net working…

A: The selling price for the machine is $19,722.The book value of the machine is $12,039.The gain made…

Q: A property is sold for $6,200,000 and the mortgage balance at the time of sale is $3,600,000. The…

A: Depreciation recapture- It is a tax provision that powers the IRS to collect taxes on any profitable…

Q: a. If taxes are 25%, what is the After tax operating cash flow for the first year?

A: Given: Operating income = $200,000 Purchased for = $2,000,000 Land portion = $200,000 Building…

Q: Alpha purchased delivery equipment amounting to P100,000 and plans to sell the asset for P10,000 at…

A: The formula to calculate annual depreciation is Cost - SalvageUseful life

Q: Robert Cooper is considering purchasing apiece of business rental property containing storesand…

A: The property belongs to a 39-year real-property class of MACRS. The property will be in use for a…

Q: ABC, Inc., is considering purchase of a new equipment. The expected sales are expected to be…

A:

Q: -Suppose a 5-year piece of equipment purchased for 500,000 is sold at the end of year 4 after taking…

A:

Q: An asset with a first cost of $250,000 and a 5-year recovery period is subject to MACRS…

A: Answer has been given in the next sheet.

Q: In year zero, a corporation acquires P300,000 worth of equipment. It decides to utilize straight…

A: Straight-line depreciation is the method of depreciation that depreciates an asset at a fixed…

Q: Property, in the form of unimproved land, is purchased at a cost of $8000 and is held for 6 years,…

A: Information Provided: Cost = $8000 Sold = $32,600 Property tax = $220 Interest = 12% Income tax =…

Q: You are a small business owner and have purchased a $10,000 asset that you can depreciate over four…

A:

Q: An asset costs $420,000 and will be depreciated in a straight-line manner over its 3-year life. It…

A: Net leasing advantage is the total savings a person would earn when they chose to lease  an asset as…

Q: Consider an asset that costs $665,000 and is depreciated straight-line to zero over its nine-year…

A: Given information: Asset cost is $665,000 Asset sold for $137,000 Total life is 9 Used for 5 years…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.