Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective income tax rate is 35%, answer the following true/false questions.
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- 5 ts eBook Hint Print ferences Problem 17.049: Calculate the after-tax AW of two alternatives A European candy manufacturing plant manager must select a new irradiation system to ensure the safety of specific ingredients, while being economical. The two alternatives available have the following estimates: System First Cost, $ CFBT, $ per Year Life, Years A -150,000 60,000 3 B -80,000 20,000 5 Check my w The company is in the 35% tax bracket and assumes classical straight line depreciation for alternative comparisons performed at an after-tax minimum acceptable rate of return (MARR) of 8% per year. A salvage value of zero is used when depreciation is calculated; however, system B can be sold after 5 years for an estimated 8% of its first cost. System A has no anticipated salvage value. Determine which is more economical using an annual worth (AW) analysis worked by hand. The annual worth analysis for system A is determined to be $ The annual worth analysis for system B is determined to…Pertinent information for two alternatives A and B is shown below. If i-10%/year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A Alt.B Basis, $ 150,000 225,,000 Gross Income (GI), $ 100,000 100,000 Operating Expense (OE), $ 30,000 10,000 Salvage Value, $ 15,000 22,500 MARCS Recovery, Years The CFAT at the end of year 5 for Alt. A is greater than $50,000. O True O FalseProblem 17.049: Calculate the after-tax AW of two alternatives A European candy manufacturing plant manager must select a new irradiation system to ensure the safety of specific ingredients. while being economical. The two alternatives available have the following estimates: System First Cost, $ CFBT, $ per Year Life, Years A B. -100,000 -120,000 60,000 20,000 3. The company is in the 35% tax bracket and assumes classical straight line depreciation for altemative comparisons performed at an after-tax minimum acceptable rate of return (MARR) of 7% per year. A salvage value of zero is used when depreciation is calculated; however, system B can be sold after 5 years for an estimated 12% of its first cost. System A has no anticipated salvage value. Determine which is more economical using an annual worth (AW) analysis worked by hand. 7274 The annual worth analysis for system A is determined to be $ The annual worth analysis for system Bis determined to be $ System A v is selected.
- Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A 150,000 100,000 30,000 15,000 5 Basis, $ Gross Income (GI), $ Operating Expense (OE), $ Salvage Value, $ MARCS Recovery, Years The CFAT at the end of year 4 for Alt. A is less than $40,000. True False Alt.B 225,000 100,000 10,000 22,500 5A business invests $5000 and initially plans to achieve annual revenue of $1100/yr with $200/yr expenses (starting at the end of ar 1) for ten years. No market value if used for ten years. a-Draw a Before Tax Cash Flow Diagram (BTCFD)of the ten year plan.Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A 150,000 100,000 Basis, $ Gross Income (GI), $ Operating Expense (OE), $ Salvage Value, $ MARCS Recovery, Years True 30,000 False 15,000 5 Alt.B The depreciation charge for Alt. B at the end of year 4 is greater than $30,000. 225,,000 100,000 10,000 22,500 5
- Consider the following financial information for an engineer: Age: 25Status: Single, no childrenGross Income: $54,000 401k investment: $4000Residential status: RentingTotal eligible itemized deductions: $3000 for charitable donations What is the taxable income? (IF you need to use them, assume the standard deduction for single is $12000 and married is $24000).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. Basis, $ CFBT, $ MACRS Recovery, Years Salvage Value, $ 20,000 Useful Life, Years 6 Alt. A 200,000 40,000 5 O True False Alt.B 300,000 50,000 5 The book value (BV) at the end of year 4 for Alt. A is greater than $35,000. 30,000 7Years 1 2 3 4 5 6 n Defender -3200 -2,500 -2,650 -3,300 Annual Cost -Annual Tax for defender 0.892857083 1.690051017 2.401831268 3.037349346 3.6047762 4.111407323 PW= @12 Challenger -2857.142667 -5800 -4,225 -6,365 -10,023 0 0 -23,470 -4230 -3200 -3500 -4,000 -5,500 Annual Cost-Annual Tax for defender 0.892857142 1.690051017 2.401831268 3.037349346 3.6047762 4.111407323 PW @15% -5178.57142 -7148.9158 -7685.86006 -10630.7227 -14419.1048 -22612.7403 -67675.9151 1. For this defender/challenger study, what is the (lowest) Annual Equivalent Cost of the best feasible alternative with formula: 1. $17,200 2. $18,400 3. $21,200 4. $16,800
- Assuming 25% tax rate, 20% CCA rate and 10% discount rate, recommend the better of the following equipment, with support. Initial Cost Useful Life Salvage Value Annual Maintenance A $110,000 8 years $10,000 $1,100 B $150,000 12 years $25,000 $1,500First cost of equipment = $200,000Market value at the end of year 6 = $10,000MACRS depreciation is used. The equipment is a 5-year property.Incremental income-tax rate for the company = 35% Year 0 1 2 3 4 5 6 BT-CF (Before Tax Cash Flow) in $ -200K 60K 63K 66K 69K 72K 75KMarket value = 10K The Year 2 taxable income is equal to ________________. Group of answer choices -$1,000 $500 -$350 $400 $750 -$250Effective income tax rate After-tax MARR EOY BTCF $ ATCF $ (95,000.00) (95,000.00) $ $ $ -$6,625.00, $ 30,375.00 37,000.00 23,750.00 13,250.00 $ $ $ $ 237,000.00 23,750.00 $ 13,250.00 -$6,625.00, 30,375.00 $ $ -$6,625.00, $ 30,375.00 13,250.00 37,000.00 23,750.00 $ $ $ $ 437,000.00 23,750.00 13,250.00 -$6,625.00 30,375.00 1 3 50% 12% Taxable Income "Income Taxes Depreciation, 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); A A/ 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")?