Managerial Accounting
Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Please correct answer and don't used hand raiting
Instructions
Consider the following investment: Initial cost = $150,000.
Salvage value = $0.
Annual revenue = $50,000, Annual expenses = $15,000, 40%
Bonus depreciation.
Depreciation life = 5 Years. MARR = 11%. Tax Rate = 21%.
Depreciation method: MACRS.
Hint: Set up a Cash Flow Table and solve the problem to get the
IRR for both Before and After Tax Cash Flow.
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Transcribed Image Text:Instructions Consider the following investment: Initial cost = $150,000. Salvage value = $0. Annual revenue = $50,000, Annual expenses = $15,000, 40% Bonus depreciation. Depreciation life = 5 Years. MARR = 11%. Tax Rate = 21%. Depreciation method: MACRS. Hint: Set up a Cash Flow Table and solve the problem to get the IRR for both Before and After Tax Cash Flow.
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