A relatively small privately-owned coal-mining company has the sales results summarized below. Determine the annual percentage depletion for the coal mine. Assume the company’s taxable income is $140,000 each year. Year Sales, Tons Spot Sales Price, $/Ton 1 34,300 9.82 2 50,100 10.50 3 71,900 11.23

Labor costs, materials, all direct and indirect costs, and facilities and productive equipment with a useful life of one year or less are usually depreciated. O True O False

The Shell Corp. owns a piece of petroleum drilling equipment that costs $200,000 and will be depreciated by DDB depreciation with B=$200,000, N=10 years, S=$0. There is a combined 50% tax rate. Shell will lease the equipment to others each year and receive $80,000 per year.  At the end of 3years, the firm will sell the equipment for $100,000. If the firm requires a 10% after-tax rate of return, what is the PW of the investment?

A relatively small privately owned coal-mining company has the sales results summarized below. Determine the annual percentage depletion for the coal mine. Assume the company’s taxable income is $140,000 each year.

A relatively small privately owned coal-mining company has the sales results summarized below. Determine the annual percentage depletion for the coal mine. Assume the company’s taxable income is $150,000 each year.   Year Sales, Tons Spot Sales Price, $/Ton 1 34,300 9.82 2 50,100 10 3 71,900 11.23   Year Gross Income, $ Depletion amount 50% of the taxable amount Allowed Depletion 1         2         3

11-17 Consider a $6500 piece of machinery, with a 5-year depreciable life and an estimated $1200 salvage value. The projected utilization of the machinery when it was purchased, and its actual production to date, are as follows: Year 1 2 3 45 Projected Production (tons) 3500 4000 4500 5000 5500 Actual Production (tons) 3000 5000 [Not yet known]

Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data. Determine which is the better alternative, assuming repeatability and using SL depreciation, an income-tax rate of 30%, and an after-tax MARR of 10%. Calculate the AW value for the Machine A. Capital investment Life Terminal BV (and MV) Annual receipts Annual expenses Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. AWA (10%) = $ (Round to the nearest dollar.) Machine A $22,000 11 years $5,000 $152,000 $141,000 (...) Machine B $32,000 8 years $500 $190,000 $173,000

An asset has an initial cost of $25,000, useful life of 5 years, and no salvage value. Using Double-Declining Balance (DDB) with a switch to SL at the optimal time, complete the following depreciation table: Enter your answer exactly as follow: 123456 EOY Dn (DDB with Switch to SL) 1 Book Value 2 3 + 5

27 A consortium of international telecommunication companies contracted for the purchase and installment of a fiber optic cable linking two major cities at a total cost of US$990 million. The amount includes freight and installation charges estimated at 10% of the above contract price. If the cable shall be depreciated over a period of 16 years with zero salvage value. What is the book value after 4 years using straight line method?