
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- An asset that costs $3 million dollars will be depreciated to a zero book value across a 12 year project using the straight-line method. What is the depreciation amount per year?arrow_forwardQ5.arrow_forwardA project requires an investment of $800 in a fixed asset that is classified as a five-year asset under MACRS. The project will have a three-year life. Find the depreciation for year three.arrow_forward
- A two-year project has an initial requirement of $500,000 for fixed assets and $100,000 for net working capital. The fixed assets will be depreciated using MACRS and the fixed asset falls into the three-year MACRS class. Depreciation rates for years 1 and 2 are 0.3333 and 0.4445. The estimated salvage value is $120,000. All of the net working capital will be recouped at the end of the 2 years. Management estimates that sales revenues less costs will be $700,000 per year for years 1 and 2. The discount rate is 9 percent and tax rate is 35 percent. What is the initial investment for this project? $513,327.50 ○ $600,000 $1,300,000 $500,000arrow_forwardA project requires an initial capital spending on the fixed asset of $660,330. The asset will be depreciated straight-line to zero over the project's life of 7 years. The fixed asset's book value at the end of the first year is $arrow_forwardA nine year project involves equipment costing $2,320,000 that will be depreciated using the five-year MACRS schedule. If the estimated pre-tax salvage value for the equipment at the end of the project's life is $417,600, what is the after-tax salvage value for the equipment? Assume a marginal tax rate of 21 percent. O $329,904 $399.184 $6,496 O $505.296arrow_forward
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