Approximate the after-tax ROR on a project that had a first cost of $500,000, a salvage value of 20% of t and an annual CFBT of $230,000. Assume the company had a 25% effective tax rate. The after-tax ROR is %.
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- A start-up biotech company is considering making an investment of $100,000 in a new filtration system. The associate estimates are summarized below: Annual receipts $75,000 Annual expenses $45,000 Useful life 8 years Terminal book value (EOY 8) $20,000 Terminal market value $0 Straight-line depreciation will be used, and the effective income tax rate is 20%. The after-tax MARR is 15% per year. Determine whether this investment is an attractive option for the company.A start-up biotech company is considering making an investment of $100,000 in a new filtration system. The associated estimates are summarized below: Annual receipts $75,000 Annual expenses $45,000 Useful life 8 years Terminal book value (EOY 8) $20,000 Terminal market value $0 Straight-line depreciation will be used, and the effective income tax rate is 20% . The after-tax MARR is 15% per year. Determine whether this investment is an attractive option for the company.An investment of $1.000.000 will be included in the 7-year MACRS class for depreciation. It would also require an additional $150,000 to invest in inventory and would add $50,000 to accounts payable. Will generate $400000 in revenue and $150000 in cash expenses annually. The tax rate is 21 per cent. What are the incremental cash flows for years 0, 1, 7 and 8?
- H8. A piece of equipment has a capital investment of $1,140,000 and an annual operating expense of $115,500. The life of the equipment is 10 years, the effective income tax rate is 40%, and the after-tax MARR is 9% per year. The equipment qualifies for seven-year MACRS (GDS) properties. Perform after-tax PW analysis.Estimate the approximate after-tax rate of return for a project that has a before-tax ROR of 18.6%. Assume the company's effective tax rate is 26% and it uses MACRS depreciation for an asset that has a $40,000 salvage value. The approximate after-tax rate of return is %.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?
- In year 0 you purchase an asset for $500,000 and in year 1 you receive a positive cash flow of s100,000 from operating the asset. Following a MACRS 7-year depreciation schedule (year 1 recovery rate of 14.29 percent) and assuming you are in a 39% tax bracket, what is your year 1 after tax cash flow (ATCF) to the nearest $50 ? a) $400,000 b) $28,550 c) $11,250 d) $88,750 e) $380,750BC Junction purchased some embroidering equipment for their Denver facility 3 years ago for $15,000. This equipment qualified as MACRS 5-year property. Maintenance costs are estimated to be $1000 this next year and will increase by $1000 per year thereafter. The market (salvage) value for the equipment is $10,000 at the end of this year and declines by $1000 per year in the future. If BC Junction has an after-tax MARR of 30%, a marginal tax rate of 28% on ordinary income, depreciation recapture, and losses, what aftertax life of this previously purchased equipment has the lowest EUAC?has a cost of $53,600, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $84,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative.AWA = $enter a dollar amount AWB = $enter a dollar amount Which should be selected? What must be Investment B's cost of operating expenses for these two investments to be equivalent? $enter a dollar amount
- It is desired to purchase a piece of equipment worth $77,000 that has a useful life of four years and a salvage value of $7,000 at the end of that period. It is depreciated by SDA. Taxes are paid at a rate of 50% and the company's MARR is 13%. what should be the benefit before depreciation and taxes that the equipment generates to justify its acquisition? Answer: $30,323.48.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.Acme Manufacturing makes their preliminary economic studies using a before-tax MARR of22%. More detailed studies are performed on an after-tax basis. If their effective tax rate is23%, what is the after-tax MARR? Choose the correct answer below. A. The after-tax MARR is16.94%. B. The after-tax MARR is4.04%. C. The after-tax MARR is5.06%. D. The after-tax MARR is19.29%.