Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Karsted Air Services is now in the final year of a project. The
equipment originally cost $29 million, of which 75% has been
the used equipment today for $8 million, and its tax rate is 35%. What is the equipment’s
after-tax salvage value?
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- Karsted Air Services is now in the final year of a project. The equipment originally cost $27 million, of which 100% has been depreciated. Karsted can sell the used equipment today for $6 million, and its tax rate is 30%. What is the equipment's after-tax salvage value? Write out your answer completely. For example, 13 million should be entered as 13,000,000. Round your answer to the nearest dollar.arrow_forwardConsider an asset that costs $1,075, 196 and is depreciated straight-line to zero over its 15-year tax life. The asset is to be used in a 5-year project; at the end of the project, the asset can be sold for $109, 800. If the relevant tax rate is 0.39, what is the aftertax cash flow from the sale of this asset (SVNOT)?arrow_forward12arrow_forward
- Karsted Air Services is now in the final year of a project. The equipment originally cost $23 million, of which 100% has been depreciated. Karsted can sell the used equipment today for $6 million, and its tax rate is 20%. What is the equipment's after-tax salvage value? Write out your answer completely. For example, 13 million should be entered as 13,000,000. Round your answer to the nearest dollar. $arrow_forwardYour firm needs a machine which costs $120,000, and requires $33,000 in maintenance for each year of its 5 year life. After 5 years, this machine will be replaced. The machine falls into the MACRS 5-year class life category. Assume a tax rate of 35 percent and a discount rate of 15 percent. What is the depreciation tax shield for this project in year 5?arrow_forwardPlease see image for question to solve.arrow_forward
- You work for Tamimi Industries, which purchased robotics equipment for $500,000 six years ago. The equipment is in place today and has a total 10-year useful life, no salvage value, and a 5-year MACRS recovery period. The effective tax rate is 21% and the actual cash flow and depreciation amounts are shown. GI, S 250,000 280,000 200,000 260,000 260,000 180,000 Expenses, $ |-120,000 -120,000 F122,000 -124,000 -126,000 128,000 Depreciation, $ 100,000 160,000 96,000 57,600 57,600 28,800 Year 1 3 14 5 6 EBIT is calculated for years 1 to nand includes the Por Samounts. True or False True Falsearrow_forwardWhat is the expected after - tax cash flow from selling a piece of equipment if Probst purchases the equipment today for $548, 860.00, the tax rate is 39.9 percent, the equipment will be sold in 3 years for $98, 800.00, and the equipment will be depreciated to $72, 600.00 over 12 years using straight - line depreciation? $106, 885.74 (plus or minus $10) $262, 538.29 (plus or minus $10) - $72, 688.20 (plus or minus $10) $230,867.00 (plus or minus $10) None of the above is within $10 of the correct answerarrow_forward
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