A company which started its operation in the year 8. The pannel set the MARR at 10% after-tax. CCA rate = 20% FOR EQUIPTMENT. a) What is the remaining Undepreciated Capital cost at the end of year 20 12? b) What is the equivalent annual worth of the tax savings associated with these transactions if the corporate tax rate is 40%?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A company which started its operation in the year 8. The pannel set the MARR at 10% after-tax. CCA rate = 20% FOR EQUIPTMENT.

a) What is the remaining Undepreciated Capital cost at the end of year 20 12?

b) What is the equivalent annual worth of the tax savings associated with these transactions if the corporate tax rate is 40%?

Ca
Dollar Value of
Shi
Tax Year
Transaction
transaction
Fn
2008
Purchase of Machine A
$60,000
2009
Purchase of Machine B
$130,000
2010
Sale of Machine A
$20,000
2010
Purchase of Machine C
$80,000
2011
Sale of Machine B
$40,000
2012
Purchase of Machine D
$75,000
Transcribed Image Text:Ca Dollar Value of Shi Tax Year Transaction transaction Fn 2008 Purchase of Machine A $60,000 2009 Purchase of Machine B $130,000 2010 Sale of Machine A $20,000 2010 Purchase of Machine C $80,000 2011 Sale of Machine B $40,000 2012 Purchase of Machine D $75,000
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