Karsted Air Services is now in the final year of a project. The equipment originally cost $33 million, of which 100% has been depreciated. Karsted can sell the used equipment today for $10 million, and its tax rate is 25%. 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.

Q: The NPV of the replacement is $        ?

A: Net present value is the difference of discounted cash inflows and outflows.

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $24…

A: Given: Cost of equipment = $24 million Depreciated = 100% Tax rate = 30% Sale value = $7 million

Q: Your company is considering the replacing an old machine with a more efficient model. The new…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: You purchased a machine for $1.09 million three years ago and have been applying straight-line…

A: Purchase cost = $1,090,000 Life = 7 Years Used period = 3 years Tax rate = 0.22 Sale value =…

Q: Acefacto Inc., has asked for you to calculate the after-tax salvage value of an asset it plans on…

A: Data given: Sale price=$595,641 Book value after 10 years=$670,000 Tax rate=31%

Q: Ilana Industries Incorporated needs a new lathe. It can buy a new high-speed lathe for $1.1 million.…

A: Net present value is the most important capital budgeting methods used and is based time value of…

Q: 14) Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally…

A: Depreciation can be defined as decrease in the book value of an asset each year.

Q: You purchased a machine for $1.09 million three years ago and have been applying straight-line…

A: Purchase cost = $1,090,000 Life = 7 Years Used period = 3 years Tax rate = 0.38 Sale value =…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Equipment's after tax net salvage value = salvage value - tax on capital gain tax on capital gain =…

Q: You purchased a machine for $1 million three years ago and have been applying straight-line…

A: Calculation of the carrying amount of the machine::: Cost of the machine =$10,00,000....…

Q: John's cafe is considering the purchase of a waffle maker that cost $10,000. The waffle maker has an…

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Q: The used equipment can be sold today for $4.6 million, and its tax rate is 25%. What is the…

A: After Tax Salvage Value: It is computed by reducing the tax on profit on the sale of equipment from…

Q: You purchased a machine for $1.14 million three years ago and have been applying straight-line…

A: Incremental cash flow (ICF) is defined as the operating cash flow which is additional and received…

Q: rate is 21%. If you sell the machine today (after three years of depreciation) for $794,000, what is…

A: Incremental Cash Flow: It is the additional operating cash flow received by the firm for taking on…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: After-tax salvage value refers to the amount of equipment after the completion of its useful life…

Q: A project bought 10 years ago for $120,000 is 50 percent depreciated and can be sold today for…

A: Net salvage value refers to the residual value of an asset at the end of its useful life, after…

Q: Your firm needs a computerized machine tool lathe which costs $48,000 and requires $11,800 in…

A: Cost of the machine = $48000 Number of years = 3 MACRS depreciation rates are 33.33%, 44.45%, 14.81%…

Q: Your firm needs a machine which costs $220,000, and requires $37,000 in maintenance

A: MACRS (Modified Accelerated Cost Recovery System) is a system used to calculate tax deduction of…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Every item that a business will be recording as declining on its books over time can have an…

Q: what is the NPV of this project? ons and round your answer to 2 decin ons

A: The net present value involves taking the total expected return on an investment, deducting the…

Q: A company is considering the purchase of a new machine for $50,000, installed. The machine has a tax…

A: For evaluating any new asset or project, cashflows are considered. For overall evaluation cashflows…

Q: Your firm needs a machine which costs $280,000, and requires $43,000 in maintenance for each year of…

A: After Tax salvage value is that amount which is received by the investor from selling the assets…

Q: Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost…

A: Salvage value refers to the residual value, that is, the value at which the equipment can be traded…

Q: A developer is deciding whether to purchase some heavy-duty landscaping equipment. The alternative…

A: Computation:

Q: Fox Hollow Franks is looking at a new system with an installed cost of $540,000. This equipment is…

A: Net present value refers to the method of capital budgeting which is useful investors in evaluating…

Q: Elder, Inc. is considering the purchase of a new air-handling system that will have no effect on…

A: Savings means the amount which a firm earns by installing a new plant or project. The project which…

Q: Animals, Inc. is considering a machine that will cost $18,000 and which can be sold after 3 years…

A: Net present value refers to the method of capital budgeting used for estimating the difference…

Q: Which of the following describe differences between a tax-advantaged retirement plan and a qualified…

A: Correct option is 4- Neither I nor II

Q: _____ $

A: Capital gain is the gain that accrues from the sale of capital assets of the business. Capital…

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $24…

A: Book value of asset = 0 million (100% depreciated)  Equipment sold at = 10 million Tax rate = 20%

Q: Dog Up! Franks is looking at a new sausage system with an installed cost of $715,000. The asset…

A: Therefore, Net present value = PV of cash inflow + PV of terminal cashflow - PV of cash outflow…

Q: Karsted Air Services is now in the final year of a project. The equipment originally cost $21…

A: Equipment originally cost =21,000,000 Depreciation (100%*21,000,000)  =21,000,000 Book value…

Q: Your firm needs a computerized machine tool lathe which costs $59,000 and requires $12,900 in…

A: After-tax salvage value pertains to the residual value of an asset once the taxes applicable to its…

Q: Michelle Amabo Company is planning to buy a new machine that can produce additional 20,000 units  of…

A: Annual net cash inflows from the new machine=Net Income+Depreciation Expense

Q: 10. Marshall-Miller & Company is considering the purchase of a new machine for $60,000, installed.…

A: Allocation of the cost of the asset over the useful life of that asset is term as depreciation. It…

Q: A new delivery truck can be purchased for $30,000. The old one could be sold today for $5,000, and…

A: Cost of new truck = $30,000Sold today = $5,000Book value = $3,000Tax rate = 21%Savings =…

Q: Your firm needs a computerized tool lathe which cost $49000 and requires $119000 in maintenance for…

A: Given information: Cost of computerized tool is $49,000 Maintenance cost is $119,000 Tax rate is 34%…

Q: Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be…

A: TCF = Selling price - book value - Tax.