Estimate the approximate before-tax rate of return (ROR) for a project that has a first cost of $750,000 and a salvage value of 25% of the first cost after three years. The project’s NOI is $260,000. Assume an effective tax rate of 37%.
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Estimate the approximate before-tax
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- A project has the following net profit after tax set out below. The average book value of the assets in the project is 131,028. What is the accounting rate of return of this project? Enter your final answer in decimals to four decimal places (e.g., if your answer is 5.55%, then enter 0.0555). Year Net Profit After Tax 1 5,097 2 7,365 3 8,627 4 10,946Consider an asset that costs $311,000 and is depreciated straight-line to zero over its six-year tax life. The asset is to be used in a four-year project; at the end of the project, the asset can be sold for $58,000. If the relevant tax rate is 34 percent, what is the aftertax cash flow from the sale of this asset? Can the calculator and excel solution be provided?Estimate the approximate after-tax rate of return (ROR) for a project that has a before-tax ROR of 28%. Assume the company has Te = 37% and it uses 5-year MACRS depreciation for project assets.
- Approximate the after-tax ROR on a project that had a first cost of $500,000, a salvage value of 20% of the first cost after five years, and annual CFBT of $230,000. Assume the company had a 35% effective tax rate.The asking price (initial investment) for a project is $290,000. The end of year after tax cash flows from operations associated with this project will be $80,000 for year 1; $80,000 for year 2; -$110,000 for year 3; and $300,000 for end of year four. What is an IRR for this project? How many IRRs are possibleA corporation expects to receive $32,000 each year for 15 years if a particular project is undertaken. There will be an initial investment of $150,000. The expenses associated with the project are expected to be $7500 per year. Assume straight-line depreciation, a 15-year useful life, and no salvage value. Use a combined state and federal 28% marginal tax rate, and determine the project’s after-tax rate of return.
- A PROJECT IS ESTIMATED TO COST P 100,000.00, LASTS 8 YEARS, AND HAVE A P 10,000.00 SALVAGE VALUE. THEANNUAL GROSS INCOME IS EXPECTED TO AVERAGE P 24,000.00 AND ANNUAL EXPENSES, EXCLUDINGDEPRECIATION, WILL TOTAL P 6,000.00. IF CAPITAL IS EARNING 10% BEFORE INCOME TAXES, DETERMINE IFTHIS IS A DESIRABLE INVESTMENT USING:A.) RATE-OF-RETURN METHODB.) ANNUAL COST METHODC.) PRESENT-WORTH COST METHOD1. For ABC project, book value of the equipment is estimated to be 500,000 at the end of the project's life, and the market value is expected to be 400,000. Clean up costs are 50,000 and change in working capital is 100,000. Calculate net salvage value assuming a 30% tax rate. Paragraph В I !!A corporate expects to receive $37,399 each year for 15 years if a particular project is undertaken. There will be an initial investment of $105,308. The expenses associated with the project are expected to be $7,716 per year. Assume straight-line depreciation, a 15- year useful life, and no salvage value. Use a combined state and federal 48% marginal tax rate, MARR of 8%, determine the project's after-tax net present worth. Enter your answer as follow: 123456.78
- A project is estimated to cost 110,000, last 8 years and have a 15,000 salvagevalue. The annual gross income is expected to average 24,000 and annualexpenses, excluding depreciation, will total 6,000. If capital is earning 10% beforeincome taxes, determine if this is a desirable investment using: 1. The rate of return method :2. Annual Worth Method:A project has sales of $462,000, costs of $274,000, depreciation of $28,000, interest expense of $3,400, and a tax rate of 35 percent. What is the value of the depreciation tax shield?Consider an asset that costs $176,000 and is depreciated straight-line to zero over its 10- year tax life. The asset is to be used in a 4-year project; at the end of the project, the asset can be sold for $22,000. If the relevant tax rate is 23 percent, what is the aftertax cash flow from the sale of this asset?