MACRS for depreciation and pays taxes at the corporate rate what is the after-tax cash flow for this project in each year of the equipment's useful life? Calculate the present worth of the equipment if the company's MARR is 9 percent (ignore the
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- A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent. The firms cost of capital is 12 percent. Compute the IRR and the NPV. Should the firm accept or reject the project?Omar Shipping Company bought a tugboat for $75,000 (year 0) and expectedto use it for five years after which it will be sold for $12,000. Suppose the companyestimates the following revenues and expenses from the tugboat investmentfor the first operating year:Operating revenue $200,000Operating expenses $8400Depreciation $4000 If the company pays taxes at the rate of 30% on its taxable income, what is the net income during the first year?A corporate expects to receive $36,144 each year for 15 years if a particular project is undertaken. There will be an initial investment of $100,705. The expenses associated with the project are expected to be $7,740 per year. Assume straight-line depreciation, a 15-year useful life, and no salvage value. Use a combined state and federal 48% marginal tax rate, MARR of 8%, determine the project's after-tax net present worth.
- Given: Before -Tax Cash Flow (BT-CF) for Kal Tech Systems in 2012 for an equipment that will be depreciated using the SL method with salvage value of $10,000. Year 0 1 2 3 4 5 BT-CF -$120,000 32,000 32,000 32,000 32,000 32,000 Market value - $36,000 What is the after-tax return if the company is in the 34% income tax bracket? The incremental tax rate is 34%. Also, it is known that the before-tax return is 16.65% Group of answer choices 9.65% 11.29% 10.16% 10.99%Perform an after-tax cash flow analysis on the following data on the replacement of an old equipment with a more energy-afficient version. Use an effective tax rate of 30% and the straight-line method for depreciation. Initial Investment: 500,000Useful life: 5 yearsTerminal Value: 50,000Annual Revenues, 240,000 Annual Expenses Power: 75,000Maintenance: 25,000Property Insurance: 20,000 1. If the after-tax MARR is 6%, what is the net present worth (in pesos) of replacing the old equipment? (2 decimal places) 2. After evaluation, is the replacement of the old equipment economically feasible?Determine whether the following contract described below is worthwhile ofundertaking after taxes if at the end of the 3-year of ownership the contract, you expect to sellboth depreciable equipment and land. Use present worth analysis under MARR = 8% andeffective tax rate.
- A trucking company computes depreciation on its vehicles by a mileage basis.Suppose a delivery truck has a cost of $20.000. a sa lvage value of $2.000. andan estimated useful life of 200.000 miles. Determine the depreciation rateper mile.(a) $0.08(b) $0.09(c) $0.10(d) $0.11In 2015, a firm has receipts of $8 million and expenses (excluding depreciation) of $4 million. Its depreciation for 2015 amounts to $2 million. If the effective income tax rate is 40%, what is this firm’s net operating income after taxes (NOPAT)?The Advanced Silicon Devices semiconductor factory costs $20 million to build and is depreciated (on a straight line basis, to make this simple) over 20 years. Also it borrows the money to build the factory at 8% interest. The factory has a capacity of 400,000 chips per year that sell for $30 apiece. Labor costs are $1.5 million, and raw material costs are $0.5 million. Ongoing research and development costs are $3 million. The factory sells all its chips to the Itty Bitty Machine company, which manufactures 40,000 computers a year that sell (wholesale) for $800 each. That factory costs $35 million to build, with the same rate of interest and depreciation as the semiconductor factory. Besides paying for the chips, the costs are $4 million for labor, $2 million for other parts (half of which are imported), and $2.5 million for ongoing R&D. The computer company sells its entire stock to Computers R Us, which then sells them to individuals at an average retail price of $1,200 plus 5%…
- A): Calculate the total cost, total depreciation, and annual depreciation (in $) for the following assets by using the straight-line method. (Round your answers to the nearest cent.) *chart attached* B): Mason Industries purchased a drilling rig for $75,900. Delivery costs totaled $2,831. The useful life is 7 years and the salvage value is $12,938. Prepare a depreciation schedule using the straight-line method. *CHART ATTACHED*Refer to the chapter opener and Example 7-14. As an alternative to the coal-fired plant, PennCo could construct an 800 MW natural gas–fired plant. This plant would require the same initial investment of $1.12 billion dollars to be depreciated over its 30-year life using the SL method with SV30=0SV30=0. The capacity factor estimate of the plant would still be 80%, but the efficiency of the natural gas–fired plant would be 40%. The annual operating and maintenance expense is expected to be $0.01 per kWh. The cost of natural gas is $8.00 per million Btu and the carbon dioxide tax is $15 per metric ton. Natural gas emits 55 metric tons of carbon dioxide per billion Btu produced. The effective income tax rate is 25%, and the after-tax MARR is 10% per year. Based on the after-tax cost of electricity, create a spreadsheet to determine whether PennCo should construct a natural gas–fired or coal-fired plant. Note: 1kWh=3,413 Btu. Chapter Opener - (1st image), Example - (2nd image) For the…A manufacturing company purchased an equipment for methods improvement for P 53,000. Paid P 1,500 for freight and delivery charges to the job site. What is the yearly depreciation cost using the sinking fund method at 6% interest. The machine has P 5,000 trade in cost and 10 yrs life.