A manufacturer of aerospace products purchased three flexible assembly cells for $500,000 each. Delivery and insurance charges were $35,000, and installation of the cells cost another $50,000. a. Determine the cost basis of the three cells. b. What is the class life of the cells? c. What is the MACRS-GDS depreciation in year five? d. If the cells are sold to another company for $120,000 each at the end of year six, what is the BV at that time?

A manufacturer of aerospace products purchased three flexible assembly cells for $500,000 each. Delivery and insurance charges were $35,000, and installation of the cells cost another $50,000. a. Determine the cost basis of the three cells. b. What is the class life of the cells? c. What is the MACRS-GDS depreciation in year five? d. If the cells are sold to another company for $120,000 each at the end of year six, what is the BV at that time?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

i need the answer quickly
Material-handling equipment used in the manufacture of grain products (MACRS-GDS 10-year property) is purchased and installed for $180,000. It is placed in service in the middle of the tax year. If it is removed just before the end of the tax year approximately 4.5 years from the date placed in service, determine the depreciation deduction during each of the tax years involved using MACRS-GDS allowances. ———————- Repeat the previous problem if the material-handling equipment is removed just after the tax year, again using MACRS-GDS allowances.
PLEASE USE EXCEL AND SHOW FORMULAS Six years ago, a company purchased $30,000 of equipment. The equipment has just been sold for $5000. The equipment was depreciated using 50% bonus depreciation / 50% MACRS (using a 5-year recovery period). The actual savings due to the purchase of the equipment is shown below. The firm's MARR is 12% and it's tax rate is 25%. What is the after-tax present worth of the investment? Year 1 2 3 4 5 6 Savings 5000 6000 7000 7000 4000 3000
Katie's restaurant purchased a new grill at a cost of $6,000. The expected life of the grill is 5000 hours of production, at which time it will have a salvage value of $600. Using the units-of-production method, prepare a depreciation schedule given the following production: year 1: 1000 hours; year 2: 1250 hours; year 3: 1000 hours: year 4: 1750 hours Complete the schedule. Amount of Year Depreciation 0 1 2 $1000 $1250 $1000 $1750 (Round to the nearest dollar as needed.) 3 Accumulated Depreciation xample Get more help. 1080 $1350 $1080 $1890 Book Value $6,000 $4920 $ 3570 $ 2490 $600 Clear all Skill builder Check answer
10.
3
Small railcar manufacturing machinery had an $180,000 initial cost and a $30,000 projected salvage value after five years of use. In year 2, the revenue was $620,000, and the operating costs were $98,000. What would the difference in taxes paid in year 2 be if the depreciation method was straight line rather than MACRS if the company's effective tax rate was 36%? Year 2's MACRS depreciation rate is 32%.
A piece of machinery at a maunfacturing plant has a cost basis of $44,000, and a salvage value of $13,000 after producing 32,000 units. Using units-of-production depreciation, what is the allowed depreciation charge per unit. Express your answer in $ to the nearest $0.01.
1) Depreciation, a type of expense, is included in the A) research and development B) interest category. C) selling D) general and administrative E) retained
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
What is the expected after-tax cash flow from selling a piece of equipment if Probst purchases the equipment today for $542,980.00, the tax rate is 34.3 percent, the equipment will be sold in 3 years for $103,000.00, and the equipment will be depreciated to $60,600.00 over 12 years using straight-line depreciation? $212,549.05 (plus or minus $10) $240,125.11 (plus or minus $10) $109,035.08 (plus or minus $10) -$41,878.05 (plus or minus $10) None of the above is within $10 of the correct answer
Freeman Engineering paid $40,000 for specialized equipment for use with their new global positioning system/geographic information system (GPS/GIS). The equipment was depreciated over a 3-year recovery period using Modified Accelerated Cost Recovery System (MACRS) depreciation. The company sold the equipment after 2 years for $8,000 when it purchased an upgraded system. Determine the amount of the depreciation recapture or capital loss involved in selling the asset. The amount of capital loss is determined to be $____