What is the net effect on a project's NPV, if it's salvage value in 10 years increases from $24126 to $48252? Assume the discount rate is 8%, the CCA rate is 14.1%, the tax rate is 25%, and the half-year rule applies. a) $6734 b) $12520 c) $9393 d) $11262 e) $16860
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- The effective combined tax rate in a firm is 28%. An outlay of $2 million for certain new assets is under consideration. Over the next 9 years, these assets will be responsible for annual receipts of $650,000 and annual disbursements (other than for income taxes) of $225,000. After this time, they will be used only for stand-by purposes with no future excess of receipts over disbursements.(a) What is the prospective rate of return before income taxes?(b) What is the prospective rate of return after taxes if straight-line depreciation can be used to write off these assets for tax purposes in 9 years?(c) What is the prospective rate of return after taxes if it is assumed that these assets must be written off for tax purposes over the next 20 years, using straight-line depreciation?The effective combined tax rate in a firm is 28%. An outlay of $2 million for certain new assets is under consideration. Over the next 9 years, these assets will be responsible for annual receipts of $650,000 and annual disbursements (other than for income taxes) of $225,000. After this time, they will be used only for stand-by purposes with no future excess of receipts over disbursements. (a) What is the prospective rate of return before income taxes? (b) What is the prospective rate of return after taxes if straight-line depreciation can be used to write off these assets for tax purposes in 9 years? (c) What is the prospective rate of return after taxes if it is assumed that these assets must be written off for tax purposes over the next 20 years, using straight-line depreciation? please solve it step by stepHow much is the combined incremental tax rate (state and federal) for a company located in the state of North Carolina where the state tax rate is 0.06 (in decimal, not percent)? Express response in decimals and 3 places. Do not express an answer in percentage.
- The correctly calculated taxes due on a corporate taxable income of $13,000,000 are closest to which of the following? a. $2,730,000 b. $3,250,000c. $3,750,000 d. $4,200,000.A state has a corporate tax rate of 9.6%. If the federal tax rate is 21%, what is the combined incremental tax rate?A firm can purchase a centrifugal separator (5-year MACRS property) for $22,000. The estimated salvage value is $4,000 after a useful life of six years. Operating and maintenance (O&M) costs for the first year are expected to be $2,200. These O&M costs are projected to increase by $1,000 per year each year thereafter. The income tax rate is 24% and the MARR is 11% after taxes. What must the uniform annual benefits be for the purchase of the centrifugal separator to be economical on an after-tax basis?
- Explain why the after-tax cashflow is the cash inflow in this project.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 owedAdvise ABC Pty Ltd and Liberty Pty Ltd on the tax implications of the following arrangement.a. ABC Pty Ltd owns a country property bought as a potential factory site on whichthere is a considerable amount of gravel. At the start of the current income year,ABC granted to Liberty Pty Ltd the exclusive right for five years to excavate andremove gravel from the land in return for payments calculated as follows:i. a minimum payment by Liberty of $5,000 per month regardless of whetheror not any gravel is removed during that particular month;ii. subject to para (a), payment each month by Liberty of 50 cents per cubicmetre of gravel removed in that month; andiii. provided that if it is found at the end of any year that the total volume ofgravel removed in that year did not exceed 48,000 m3, then ABC will refundto Liberty any amount in excess of $50,000 paid by Liberty in that year underthe terms of the agreement mentioned in para (a).
- 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%Which of the following is NOT a valid valuation method for tax purposes: Select one:Special Valuation MethodReplacement Value MethodLIFO – Last in, first outFIFO – First in, first outClarence received interest from BPI from her long-term deposit amounting to P25,000. What is the amount of final tax withheld from the interest income of Clarence? a. P0 b. P2,500 c. P5,000 d. P6,250 e. Answer not given
