A 75,000-ton limestone quarry cost $2,000,000 to develop. Annual gross income for the quarry in years 1 through 5 is estimated at $1,000,000. The annual production level during years 1-5 is estimated to be 10,000 tons. The percentage depletion allowance for limestone is 5%. Assume that depletion charges do not exceed 50% of taxable income. Find the estimated depletion for year 5 based on the percentage depletion method and the cost depletion method (state the depletion factor pt as part of your solution in $ per ton).

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 $500,000

A 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 $

The Weber Company purchased a mining site for $674,927 on July 1. The company expects to mine ore for the next 10 years and anticipates that a total of 87,066 tons will be recovered. During the first year the company extracted 4,680 tons of ore. The depletion expense is a.$36,270.00 b.$62,964.00 c.$33,844.61 d.$45,287.00

A tax and duty free importation of a 30 hp sandmill for paint manufacturing cost P 360,000. Bank charges arrastre and brokerage cost P 5,000. Foundation and installation cost were P 25,000. Other incidental expenses amount to P 20,000. Salvage value of the mill is estimated to be 60,000 after 20 years. Find the appraisal value of the mill, using straight-line depreciation at the end of 15 years. 17,500.00 235,000.00 147,500.00 135,000.00 60,000.00 174,500.00

Quantum Electronic Services paid P = $40,000 for its networked computer system. Both tax and book depreciation accounts are maintained. The annual tax depreciation rate is based on the previous year’s book value (BV), while the book depreciation rate is based on the original first cost (P). Use the rates listed to plot annual depreciation and book values for each method. Develop the graphs using hand calculations or a spreadsheet, as directed by your instructor.

You are evaluating two different devices. Equipment A costs $215,000 and is used for a period of three years, with a pre-tax operating cost of $32,000 per year. Equipment B costs $355,000 and is used for six years, with a pre-tax operating cost of $42,000 per year. Both units were depreciated to book value of 0 over the life of the unit using the linear old method of depreciation, assuming a residual value of $20,000. If your tax rate is 35%, the discount rate is 9%. Calculate the average cost of the two machines for the year. Which machine do you prefer?Why?

Tory Enterprises pays $254,400 for equipment that will last five years and have a $45,200 salvage value. By using the equipment in its operations for five years, the company expects to earn $90,100 annually, after deducting all expenses except depreciation.   Prepare a table showing income before depreciation, depreciation expense, and net (pretax) income for each year and for the total five-year period, assuming straight-line depreciation is used.

A 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 $505.296

A tractor costing $20,000 is depreciated using the Modified Accelerated Cost Recovery System (MACRS). The tractor belongs to 3-year property class and the depreciation rate for Year 1 is 33.33%, for Year 2 is 44.45%, for Year 3 is 14.81%, and for Year 4 is 7.41%. The depreciation expense for Year 3 is: