A car industry invested $20,000 in cars with a 3-year useful life. The cars will have no salvage value, as the cost to remove it will equal its scrap value. The uniform annual benefits from the cars are $12,000. For a combined 25% income tax rate, and 100% bonus depreciation, compute the after-tax net present worth (NPW) using MARR if 10%.
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A car industry invested $20,000 in cars with a 3-year useful life. The cars will have no salvage value, as the cost to remove it will equal its scrap value. The uniform annual benefits from the cars are $12,000. For a combined 25% income tax rate, and 100% bonus
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- 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 $173,000BlastCo Analytics needs to purchase a new metal shaper. BlastCo's after tax MARR is 12% and the corporate tax rate is 54%. A metal shaper is a CCA Class 8 asset. The remaining data are contained in the table below. Model Flex First Cost Economic Life Annual Net (Years) Savings $100,000 5 Blender $120,000 5 Flextastic $200,000 5 $50,000 $55,000 $75,000 Salvage Value $20,000 $25,000 $100,000A 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
- 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 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.A new municipal refuse collection vehicle can be purchased for $84,000. Itsexpected useful life is six years, at which time the market value and book value will be zero. Before-tax cash flow (BTCF) will be +$18,000 per year over the six-year life of the vehicle. Solve, a. Use straight-line depreciation, an effective income tax rate of 40% and an after-tax MARR of 12% to determine the present worth of the investment. b. What is the after-tax internal rate of return? c. Is this vehicle a sound investment? Explain your answer.
- Performing replacement studies requires knowledge of the depreciation schedule and of taxable e gains or losses at disposal. True or false?why?Hello, please explain how to solve EVA in year 3. Thank you Effective income tax rate After-tax MARR EOY BTCF Depreciation, $ (95,000.00) $ $ ¹37,000.00 23,750.00 $ $ 237,000.00 23,750.00 $ 3, $ 37,000.00 23,750.00 $ $ 437,000.00 23,750.00 0, 50% 12% Taxable Income 'Income Taxes ATCF $ (95,000.00) $ 13,250.00 $ 13,250.00 -$6,625.00 -$6,625.00 $ 13,250.00 $ -$6,625.00, 13,250.00 3 -$6,625.00 $ 30,375.00 $ 30,375.00 $ 30,375.00 $ 30,375.00 C For the given table, find the EVA in year 3 (please round the result to integer, e.g., if the result is $ 5,732.07, fill in 5732); Should this project be invested based on the annual/present/future equivalent EVA (fill in "1" if the answer is "yes", otherwise fill in "0")?A new shoe production line is being designed at a cost of $245,000 and operating costs areexpected to be $84,000 per year. Planned annual production is 2500 pairs and the price of a pair ofshoes is $110. The line's service life is 14 years, the depreciation rate is 25%. Use a 19% annual interestrate for the base case. Using the interval [-20%, -10%, +10%, +20%], perform a present worthsensitivity analysis using a sensitivity graph with respect to the following variables in terms of theirimpact on the Present worth.a) First Costb) Operative costc) Annual Productiond) Salvage Value
- The 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?BlastCo Analytics needs to purchase a new metal shaper. BlastCo’s after-tax MARR is 12% and the corporate tax rate is 54%. A metal shaper is a CCA Class 8 asset. The remaining data are contained in the table below. Model First Cost Economic Life (Years) Annual Net Savings Salvage Value Flex $100,000 5 $50,000 $20,000 Blender $120,000 5 $55,000 $25,000 Flextastic $200,000 5 $75,000 $100,000 (a) Using the annual worth method, which model should BlastCo buy?(b) What is the approximate after tax IRR of each model?(c) What is the exact after tax IRR of each model? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.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%