A business is considering purchasing a $200,000 management system. The plan is to depreciate to zero straight-line in four years, after which the market value of the system will be $30,000 This system will save the business $60,000 in pre-tax inventory costs and $45,000 in net working capital · Tax = 39%, r = 10% · Question: NPVIRR

A concrete and rock crusher for demolition work has been purchased for $50,000, and it has an estimated SV of $12,000 at the end of its five year life Engineers have estimated that the following units of production (in m³ of crushed material) will be contracted over the next five years. Using the units of production depreciation method, what is the depreciation allowance in year three, and what is the BV at the end of year two? The depreciation allowance in year three is $ The BV at the end of year two is $. (Round to the nearest dollar) (Round to the nearest dollar) EOY m³ 1 14,000 2 26,000 3 35,000 4 17,000 5 8,000

Consider the following information for year 1 of a project using equipment that had an initial cost of $100,000, and an estimated salvage value of $10,000 at disposal: BTCF = $16,000MACRS 10-year property classState & Federal Combined Income Tax Rate: 45% What is the ATCF for year 1?

A proposed cost-saving device has an installed cost of $610,000. It is in Class 8 (CCA rate = 20%) for CCA purposes. It will actually function for five years, at which time it will have no value. There are no working capital consequences from the Investment, and the tax rate is 35%. a. What must the pre-tax cost savings be for us to favour the Investment? We require an 10% return. (Hint: This one is a variation on the problem of setting a bid price.) (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Cost savings $ 94,000 b. Suppose the device will be worth $85,000 in salvage (before taxes). How does this change your answer? (Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) Cost savings $80,769.23