Problem 17.029 DEPENDENT MULTI-PART PROBLEM - ASSIGN ALL PARTS Determine 10%-per-year present worth (PW) of taxes over a 6-year study period. P= $100, 5= 0, GI-OF=$50, and Te 30%. Problem 17.029.a: Calculate the PW of taxes over the depreciable life of an asset using SL method . Use straight line method to determine the present worth (PW) of the tax with = 4 years. The PW of taxes is determined to be $ -23.77
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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?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%A company with a 34% marginal income tax rate is considering the purchase of a $75,000 piece of equipment that is classified as 3-year property in the MACRS depreciation schedule. The equipment will provide the following estimated benefits in Year 1-5. Year Before-Tax Cash Flow 0 −$75,000 1 $10,000 2 $25,000 3 $50,000 4 $15,000 If the company purchases the equipment, how much income tax will it owe in Year 3? Group of answer choices $13,223 $17,000 $25,500 No income tax is owed
- An asset for drilling was purchased and placed in service by a petroleum production company. Its cost basis is $60,000, and it has an estimated MV of $12,000 at the end of an estimated useful life of 14 years. Compute the depreciation amount in the third year and the BV at the end of the fifth year of life by each of these methods: (7.3, 7.4) a. The SL method. b. The 200% DB method with switchover to SL. c. The GDS. d. The ADS.Shell Philippines, a multinational company, developed an oil well which is estimated to contain 5,000,000 barrels of oil at an initial cost of $50,000,000. What us the depletion charge during the year where it produces half million barrels of oil.Omar Shipping Company bought a tugboat for $75,000 (year 0) and expected to use it for five years after which it will be sold for $12,000. Suppose the company estimates the following revenues and expenses from the tugboat investment for the first operating year: If the company pays taxes at the rate of 30% on its taxable income, what is the net income during the first year? (a) $28,700(b)$81,200(c) $78,400(d) $25,900
- Olivia’s asset is purchased for Php 25,000. Its estimated life is 12 years after which it will be sold for Php 15,000. Find the depreciation for the 5th year and book value at the end of 8th year using Straight Line Method. a. 833.33 - 18,333.36 b. 833.33 - 4,166.67 c. 4,166.67 - 18,333.36 d. 533.33 - 4,166.67An asset that is book-depreciated over a 5-year period by the straight line method has C3 = P 2,800,000 with a depreciation charge of P1,170,000 per year. Using straight line method what is the assumed salvage value? a) P 250,050 b) P 350,020 c) P 587,000 d) P 460,000The first costs of an equipment is P 65,000 and a salvage value of X at the end of its life of 7 years. Find the value x if using Straight Line Method, the total depreciation after 3 years is P 26,571.43. a. P 3,000 b. 0 c. P 4,000 d. P 5,000
- A trucking company computes depreciation on its vehicles by a mileage basis.Suppose a delivery truck has a cost of $20.000. a salvage 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) $0.11Only typed answer Chanveida finds a home listed for $48k. Similar homes in good condition sell for $60k (market value). She pays $35k. Closing costs are $2k, estimated fix-up is $7k, and holding costs are $3k. She ‘flips’ the property after 3 months for $58k. Her closing costs upon sale are 7% of the sell price. Her overall tax rate is 30%. Assume no financing is used and there is no depreciation taken. Determine Chanveida's Net Sell Price. (Do not show a decimal or cents in your answer)A corporation in 2018 expects a gross income of $680,000, total operating expenses of $480,000, and capital investments of $29,000. In addition the corporation is able to declare $53,000 of depreciation charges for the year. The federal income tax rate is 21%. What is the expected taxable income and total federal income taxes owed for the year 2018?