FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A new piece of equipment costs $500,000, and depreciated according to the 5 year MACRS
schedule. Assume the equipment makes you earn 350,000 a year more, and increases the
operating expenses by $100,000 annually. Assume a federal applicable tax rate of 32%.
For year 2, calculate:
(a) before tax cash flow (BTCF)
(b) taxable income
(c) taxes due
(d) after tax cash flow (ATCF)
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Transcribed Image Text:A new piece of equipment costs $500,000, and depreciated according to the 5 year MACRS schedule. Assume the equipment makes you earn 350,000 a year more, and increases the operating expenses by $100,000 annually. Assume a federal applicable tax rate of 32%. For year 2, calculate: (a) before tax cash flow (BTCF) (b) taxable income (c) taxes due (d) after tax cash flow (ATCF)
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