What is the after-tax present worth of a chip placer if it costs $75,000 and saves $23,000 per year? The after tax interest is 10%. Assume the device will be sold for $7500 salvage value at the end of its 6 year life. Assume the chip placer falls under CCA Class 8. The corporate income tax rate is 54%.
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- New equipment costing $30,000 has a 5-year life and no salvage value. Benefits are expected to be $8000 per year. The equipment qualifies for 100% bonus depreciation. The firm has a 28% combined marginal income tax rate. What is the after-tax rate of return?A new machine costs $899,090 and falls in a 29.50% CCA class. The machine will have zero value after 5 years of use but will save $417,680 annually in operating costs before taxes in those five years. Assume a tax rate of 34.17%. Using a required return of 15.11%, what is the equivalent annual cost (EAC) of the machine purchase, considering the annual cash flow, initial purchase, and CCA tax shield? Options $59,682 $61,252 $62,823 $64,393 $65,964A company paid $200,000 for a machine to make a new product. The machine has a 5 year life and a salvage value of $20,000. The company makes $49,500 per year on the new product. Assuming a 31% tax rate and straight-line depreciation, what is the before tax and after tax rates of return on the investment over its 5 year life? (Do not interpolate. Round to the closest rate in appendix C of the book). And Please show work and also post on excel sheet
- A small print shop is investing in new printing equipment that will cost $30,000. They estimate that they will gain of $12,000 per year in additional revenues for each of the next 6 years. At the end of 6 years, the equipment will have a salvage value of $3,500. Assuming a tax rate of 22%, a MACRS 5-year property class, 50% bonus depreciation, and an after-tax MARR of 10%, compute the present worth of the printing equipment and determine whether or not the print shop should invest in it. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. %24A startup is considering buying a $295,000 piece of equipment. If it purchases the equipment, it will take a loan for the entire amount; the interest on the loan is 2%, and the loan will be repaid in 5 equal end of year payments. The startup estimates that the equipment would generate an additional $170,000 of revenue each year. At the end of 5 years, the equipment would have a salvage value of $21,000. The tax rate is 24%. Assuming a planning horizon of 5 years, that the equipment is depreciated using MACRS (3-year property class), and that the medical practice uses an after-tax MARR of 9%, compute the PW and determine whether the startup should invest in the equipment. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. $ Carry all interim calculations to 5 decimal places and then round…Performing replacement studies requires knowledge of the depreciation schedule and of taxable e gains or losses at disposal. True or false?why?
- A small print shop is investing in new printing equipment that will cost $30,000. They estimate that they will gain of $10,000 per year in additional revenues for each of the next 6 years. At the end of 6 years, the equipment will have a salvage value of $2,500. Assuming a tax rate of 23%, a MACRS 5-year property class, 50% bonus depreciation, and an after-tax MARR of 11%, compute the present worth of the printing equipment and determine whether or not the print shop should invest in it. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±10. Should the print shop invest in the printing equipment?A firm must decide between two silicon layer chip designs from Intel. Theireffective income tax rate is 40%, and Straight Line depreciation method is used. If the desired after-tax return on investment is 10% per year, which design should be chosen? State your assumptions. Design A Design BCapital Investment $1,000,000 $2,000,000Salvage Value at end of life $1,000,000 $1,100,000Annual revenue less expenses $200,000 $400,000Useful Life 7years 6 yearsThe Shell Corp. owns a piece of petroleum drilling equipment that costs $200,000 and will be depreciated by DDB depreciation with B=$200,000, N=10 years, S=$0. There is a combined 50% tax rate. Shell will lease the equipment to others each year and receive $80,000 per year. At the end of 3years, the firm will sell the equipment for $100,000. If the firm requires a 10% after-tax rate of return, what is the PW of the investment?
- 9.16 You purchased a molding machine at a cost of $88,000. It has an estimated useful life of 12 ycars with a salvage value of $8,000. Determine the following: (a) The amount of annual depreciation computed by the straight-line method. (b) The amount of depreciation for the third year computed by using the double- declining-balance method.urgent A firm can purchase a centrifugal separator (5-year MACRS property) for $17,000. 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$1,700. These O&M costs are projected to increase by $500 per year each year thereafter. The income tax rate is 25% and the MARR is 13% after taxes. What must the uniform annual benefits be for the purchase of the centrifugal separator to be economical on an after-tax basis? The uniform annual benefits should be........... (Round to the nearest dollar.)Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data. Determine which is the better alternative, assuming repeatability and using SL depreciation, an income-tax rate of 30%, and an after-tax MARR of 10%. Calculate the AW value for the Machine A. Capital investment Life Terminal BV (and MV) Annual receipts Annual expenses Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. AWA (10%) = $ (Round to the nearest dollar.) Machine A $22,000 11 years $5,000 $152,000 $141,000 (...) Machine B $32,000 8 years $500 $190,000 $173,000