An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has an acquisition cost of $20,349,349 and will be sold for $7,887,127 at the end of the project. If the tax rate is 0.29, what is the aftertax salvage value of the asset (SVNOT)?
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- An asset used in a 4-year project falls in the 5-year MACRS class, for tax purposes. The asset has an acquisition cost of $22,302,334 and will be sold for $5,717,194 at the end of the project. If the tax rate is 0.37, what is the aftertax salvage value of the asset (SVNOT)? TABLE 9.7 Modified ACRS depreciation allowances Year 3-Year 1 33.33% 44.45 14.81 7.41 2345678 Property Class 5-Year 20.00% 32.00 19.20 11.52 11.52 5.76 7-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46An asset used in a 4-year project falls in the 5 year MACRS class, for tax purposes. The asset has an acquisition cost of $18, 983, 985 and will be sold for $7, 739, 110 at the end of the project. If the tax rate is 0.32, what is the aftertax salvage value of the asset (SVNOT)?An asset used in a four-year project falls in the five-year MACRS class (MACRS Table) for tax purposes. The asset has an acquisition cost of $7,800,000 and will be sold for $1,860,000 at the end of the project. What is the book value of the equipment at the end of Year 4? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Book value If the tax rate is 25 percent, what is the aftertax salvage value of the asset? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Aftertax salvage value
- Freedom Corporation acquired a fixed asset for $300,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 7% and an income tax rate of 40%. (Use Exhibit 12.4, Appendix C, TABLE 1 and Appendix C, TABLE 2) Jy Required: 1. What is the incremental present value of the tax benefits resulting from calculating depreciation using the sum-of-the-years'-digits (SYD) method rather than the straight-line (SLN) method on this asset? Use the SYD and SLN functions in Excel to calculate depreciation charges. 2. What is the incremental present value of the tax benefits resulting from calculating depreciation using the double-declining-balance (DDB) method rather than the straight-line (SLN) method on this asset? Use the SLN and DDB functions in Excel to calculate depreciation charges. 3. What is the incremental present value of the tax benefits resulting from using MACRS rather than straight-line (SLN) depreciation? The asset qualifies as a…The MACRS depreciation allowances on 3-year property are 33.33%, 44.45%, 14.81%, and 7.41%, respectively. What is the amount of the depreciation for Years 1, 2, and 3 for a 3-year property with an initial cost of $64,000?son.5 An asset used in a 4-year project falls in the 5-year MACRS class (refer to MACRS table on page 289), for tax purposes. The asset has an acquisition cost of $15,927,647 and will be sold for $5,627,208 at the end of the project. If the tax rate is 0.29, what is the aftertax salvage value of the asset ?
- An asset bought for R2 million in 2020 with a useful life of four years, depreciated by way of the straight-line method over four years, is sold for R1 million in 2023 (3 years after being taken into use). What would the net proceeds from the sale be? (Assume a tax rate of 27%.) O a. R500 000 O b. R865 000 c. R1 000 000 O d. R1 500 000Tony Industries plan to sell a machine in the current tax year. The cost basis presented is RM500,000 and the accumulated depreciation is RM450,000. The effective income tax rate is 0.30. Determine: the minimum sold price required of the machine to gain on the disposal and (i) (ii) the revised minimum sold price required of the machine to gain on the disposal if the effective income tax rate adjusted to 0.50 while accumulated depreciation increased 10 %.Consider a 5-year MACRS property asset with an installed and “made ready for use” cost basis of $100. (Note: The $100 value used here is for illustration purposes in developing the rates. One would not depreciate an asset with a cost basis of only $100.) Develop the MACRS percentage rates (rt) for the asset based on the underlying depreciation methods.
- Verify the 5- and 7-year property class percentages byapplying the 200% DB approach to a piece of equipmentwith a nominal value of $1,000. For the 7-year propertyclass, in what year is the switch from 200% DB to StraightLine? Only half of the first and last years are considered inthe computations. This means that for a 5-year class property,instead of deducting 100% × (2/5) = 40% in the firstyear, only half (40%/2 = 20%) is deducted.A MACRS-depreciated asset has B = $100,000, S = $40,000, and a 10-year recovery period. (The dt values for years t = 1, 2, 3, 4 and 5 are 10.00%, 18.00%, 14.40%, 11.52%, and 9.22%, respectively.) The depreciation charge for year 4 according to the MACRS method is closest to:a. $58,700b. $62,400c. $11,500d. $46,100Freedom Corporation acquired a fixed asset for $100,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 8% and an income tax rate of 40%. (Use Exhibit 12.4, Appendix C, TABLE 1 and Appendix C, TABLE 2.) Required: 1. What is the incremental present value of the tax benefits resulting from calculating depreciation using the sum-of-the-years’-digits (SYD) method rather than the straight-line (SLN) method on this asset? Use the SYD and SLN functions in Excel to calculate depreciation charges. 2. What is the incremental present value of the tax benefits resulting from calculating depreciation using the double-declining-balance (DDB) method rather than the straight-line (SLN) method on this asset? Use the SLN and DDB functions in Excel to calculate depreciation charges. 3. What is the incremental present value of the tax benefits resulting from using MACRS rather than straight-line (SLN) depreciation? The asset qualifies as a…