Find the equivalent annual cost for a machine that costs $50,000 today, is depreciated straight-line to zero over its 5-year life and has pre-tax maintenance costs of $3,000 per year. There is no salvage value. Your tax rate is 34% and your discount rate is 15 %.
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- Hello. Need help with the solution to question. Calculate the annual straight-line depreciation for a machine that costs $30,000 and has installation and shipping costs that total $2,000. The machine will be depreciated over a period of 15 years. The company’s marginal tax rate is 40 percent. Round your answer to the nearest dollar.Your firm needs a computerized machine tool lathe which costs $47,000 and requires $11,700 in maintenance for each year of its 3- year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category, and neither bonus depreciation nor Section 179 expensing can be used. Assume a tax rate of 21 percent and a discount rate of 11 percent. Calculate the depreciation tax shield for this project in year 3. Note: Round your answer to 2 decimal places. Answer is complete but not entirely correct. 4,286.00 Depreciation tax shieldiYour firm needs a computerized machine tool lathe which costs $53,000 and requires $12,300 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category, and neither bonus depreciation nor Section 179 expensing can be used. Assume a tax rate of 21 percent and a discount rate of 12 percent.Calculate the depreciation tax shield for this project in year 3. (Round your answer to 2 decimal places.)
- At the end of the economic life of a machine, the salvage value is $1,500 while the book value is $800. Suppose that the marginal tax rate is 40%, what is the after-tax salvage value?Planet Enterprises is purchasing a $9.6 million machine. It will cost $48,000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.1 million per year along with incremental costs of $1.1 million per year. Planet's marginal tax rate is 30% . You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated? The free cash flow for year 0 will be ? The free cash flow for years 1-5 will be ?Your firm needs a machine which costs $190,000, and requires $34,000 in maintenance for each year of its 3 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35% and a discount rate of 12%. If this machine can be sold for $19,000 at the end of year 3, what is the after tax salvage value?
- Your firm needs a computerized machine tool lathe which costs $55,000 and requires $12,500 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category, and neither bonus depreciation nor Section 179 expensing can be used. Assume a tax rate of 21 percent and a discount rate of 13 percent.Calculate the depreciation tax shield for this project in year 3. (Round your answer to 2 decimal places.) Depreciation tax shield?______Michelle Amabo Company is planning to buy a new machine that can produce additional 20,000 units of product per year. The product sells for P50 each. The cost associated with the product is P30 per unit, exclusive of depreciation on the new machine. The new machine which is expected to last for 10 years will cost P500,000. No salvage value is expected to be recovered at the end of its life. The income tax rate is 35%. Required: 1. Accounting net income 2. Annual net cash inflows from the new machine.A firm is looking at a new project requiring a machine that would cost $500,000.The cost will be depreciated straightline to zero over the project's 5yr life at the end of which the machoine can be scrapped for $125,000. the tax rate = 23%. Calculate the machine's after-tax salvage value.
- A machine costs $50.000 and it requires $1,200 as maintenance fees for each year over its five-year life. After that, this machine has to be replaced by a new one. Assume a tax rate of 20% and a discount rate of 12%. If the machine belongs in a 30% CCA class and has no salvage value. what is the EAC,Daily Enterprises is purchasing a $9.8 million machine. It will cost $47,000 to transport and install the machine. The machine has a depreciable life of 5 years, is using straight-line depreciation, and will have no salvage value. The machine will generate incremental revenues of $3.6 million per year along with incremental costs of $1.12 million per year. Daily's marginal tax rate is 21%. You are forecasting incremental free cash flows for Daily Enterprises. a. If Daily Enterprises decides to use MACRS instead of straight-line depreciation, how would the incremental free cash flows associated with the new machine change? b. Under the TCJA of 2017, Daily Enterprises has the option to take 100% "Bonus" depreciation in the year in which the equipment is put into use. This means that in that year, it would take the full depreciation expense equivalent to the cost of buying the equipment. If Daily does so, which cash flows would increase and which would decrease? How does this compare to…A firm is considering purchasing a machine that costs $56000. It will be used for six years, and the salvage value at that time is expected to be zero. The machine will save $45000 per year in labor, but it will incur $9000 in operating and maintenance costs each year. The machine will be depreciated according to five-year MACRS. The firm's tax rate is 40%, and its after-tax MARR is 14%. Should the machine be purchased?