None Given the following information, please cPurchase Price: $900,000 Loan: $750,000, 5%, 25 years (annual payments)Year 1 NOI: $100,000 Year 2 ATCF: $33,000 Year 3 ATCF: $34,000 Use an 85/15 ratio for depreciation. 39 year, straightline. 35% tax rate on income, 15% on long term capital gains, 25% depreciation recapture. What is the after tax cash flowfrom the sale at the end of year 3? and what is the IRR of the investment?

We will systematically analyse the calculations, providing a thorough explanation of each step. 1.…

Answered: Given the following information, please…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...

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Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 40%, answer the following true/false questions. Alt. A Alt.B 300,000 50,000 Basis, $ CFBT, $ MACRS Recovery, Years Salvage Value, $ Useful Life, Years O True 200,000 O False 40,000 5 20,000 6 The CFAT of Alt. B at the end of year 1 is less than $5,000. 5 30,000 7
Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 40%, answer the following true/false questions. True Alt. A 200,000 40,000 Basis, $ CFBT, $ MACRS Recovery, Years 5 Salvage Value, $ Useful Life, Years The CFAT at the end of year 7 for Alt. B is greater than $50,000. False 20,000 Alt.B 300,000 50,000 6 5 30,000 7
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Consider a piece of equipment that initially cost $8,000 and has these estimated annual expenses and MV: End of Year, k 1 2 3 6 7 8 5 years 3 years 4 years If the after-tax MARR is 7% per year, determine the after-tax economic life of this equipment. MACRS (GDS) depreciation is being used (five-year property class). The effective income tax rate is 40%. 6 years Annual Expenses 7 years $3,000 3,000 3,500 4,000 4,500 5,250 6,250 7,750 MV at End of Year $4,700 3,200 2,200 1,450 950 600 300 0 Reread chapter and try again. Use equation to calculate the TC for each year of retention, and solve for EUAC of each year.
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Consider an income property that is under evaluation for purchase with a $489,398 loan, 3.3% interest rate, compounded annually, amortized over 29 years. The NOI at the end of year 1 is $48,148, year 2 is $54,192, and year 3 is 55,470. At the end of year 3, the property is estimated to sell for $525,700. Discount the equity cash flows over the 3-year holding period at 6.0 percent. Using the principles of mortgage equity capitalization, what is the estimated total property value with a holding period of 3 years? Please post step by step solve.
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