1.You buy an apartment building for $950,000, the land value is 25%. You sell the property in 7 years for $1,500,000. You pay a 6% commission and the closing costs are $12,000. A.How much depreciation is subject to recapture? B.What is the maximum federal tax rate charged on the Recapture of depreciation? B. What is the capital gain upon the sale of the property?

Q: An investor is considering buying a property for shillings 500,000. The cost of land is 20% of the…

A: Here, To Find: Equity IRR =?

Q: depreciated on the reducing-balance

A: Year Opening book value (A) Depreciation (B =A * 40%) Closing book value or NBV (A - B) 1 RM41,000…

Q: capitalized cost of the commodity and the equivalent uniform annual cost.

A: Capitalized cost can be defined as the present value of cashflows which continue for an infinite…

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: A company planned to invest $200,000 to add some equipments in it's production line. This new…

A: Net Fixed Assets is the residual value of the fixed asset. If the value obtained from it is low then…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Equipment's after tax net salvage value = salvage value - tax on capital gain tax on capital gain =…

Q: Talia's Tutus bought a new sewing machine for $45,000 that will be depreciated over 5 years using…

A: The calculation of depreciation rate under double declining balance method has been made as follows:

Q: You purchased a machine for $1 million three years ago and have been applying straight-line…

A: Calculation of the carrying amount of the machine::: Cost of the machine =$10,00,000....…

Q: A company is evaluating a new 4-year project. The equipment necessary for the project will cost…

A: Initial cost of the project = $2,900,000 Salvage value = $ 655,000 Dpreciation method = 5-years…

Q: Regal Industries is replacing a grinder purchased 5 years ago for $15,000 with a new one costing…

A: solution : given : calculation of book value of old equipment cost      = $15,000 life        = 15…

Q: The capital cost of a property is $5900000. A CCA rate of 20% is applied. The tax rate is 30%. Take…

A: Capital Cost allowance calculates depreciation on the basis of declining balance method. In the…

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: 2.) A company is considering purchasing a new automated machine that is expected to generate an…

A: A Company is considering of purchasing a new automated machine that is expected to generate…

Q: Talia’s Tutus bought a new sewing machine for $70,000 that will be depreciated over 5 years using…

A: Under double declining method, depreciation is charged at double the rate of straight line method…

Q: A machine now in use, which was bought five years ago for $4,000, has been fully depreciated. It can…

A: Opportunity cost: The opportunity cost is the benefit that has been lost due to the selection of…

Q: You purchased a building 5 years ago for P 5M. Its annual maintenance expense has been P 250,000 per…

A: Cash Flow Diagram: It consists of a horizontal line that represent income and expenses over  time…

Q: A property is sold for $7,600,000 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: 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: Newton Company is considering the purchase of an asset that will provide a depreclation tax shleld…

A: solution : given depreciation tax shield per year               = $10,000 tax rate…

Q: 23,300 in labour costs, and will be useful for 9 years. Suppose that for tax purposes, the lathe…

A: Net present value is the difference between present value of cash flow and initial investment.

Q: A machine has a first cost of $10,000 and an expected salvage value of $900 when it is sold.…

A: Payback period is the period which depicts the recovery period within which the cash outflows of the…

Q: Xon, a small oil equipment company, purchased a new petroleum drilling rig for $2,000,000. Xon will…

A: IRR (internal rate of return) is the rate of return an asset generates in its lifetime expressed in…

Q: 10. Marshall-Miller & Company is considering the purchase of a new machine for $60,000, installed.…

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

Q: A firm has recently purchased Class 10 equipment for $100,000 with a CCA rate of 30%. What is the…

A: "Since you have asked multiple questions, we will solve the first question for you". If you want any…

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: An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax…

A: Here, Time Period of Project is 4

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: Hull Manufacturing Co. must decide whether to purchase or lease a new piece of equipment. The…

A: Computation:

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

A: Cost of equipment = $ 116000 Sale price after 2 years = $ 50000 Tax rate = 35% Book value after 2…

Q: Talia’s Tutus bought a new sewing machine for $90,000 that will be depreciated over 5 years using…

A: Double decline method depreciation is charged double that of straight line depreciation.it give more…

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 house and lot are for sale for $155,000. It is estimated that $45,000 is the land’s value and…

A: Given that,  PV of the Land = $ 45,000 PV of the house = $ 1,10,000 Annual rental income (before…

Q: n asset used in a four-year project falls in the five-year MACRS class for tax purposes. he asset…

A: MACRS is accelerating depreciation method in which depreciation is more beginning and decrease in…

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

A:

Q: Karsted Air Services is now in the final year of a project. Theequipment originally cost $29…

A: Salvage value is the value of an asset at the end of its life. It can be calculated by deducting the…

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: Izmir Endustri will buy a CNC machine for 100,000 dollars. The economic life of the bench is 10…

A: Cost of capital is the total cost incurred for raising the capital for the business. It can be…

Q: Consider an asset that costs $690,000 and is depreciated straight-line to zero over its eight-year…

A: Salvage value can be defined as the value of an asset received by the company after completing or…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Cost of equipment = $ 18,200,000 Depreciated value = 75% Book value now = Cost of…

Q: Consider an asset that costs $369,600 and is depreciated straight-line to zero over its 7-year tax…

A: cost of the asset = $369,600 Depriciation each year =$369,600/7 = 52800 Value of asset after 4 years…

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

A:

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Net cost of Equipment = Cost of equipment - Depreciation = $13,500,000 - $13,500,000 x 65% =…