Mike Mulligan Excavation Inc. has one Caterpillar 345DL Hydraulic Excavator. It was purchased at the beginning of 20X4 for $352,141. The excavator is in Class 43 with a 30% depreciation rate. Assume that the corporate tax rate is 35% and that Mike’s cost of capital is 10%. What is the present value of tax shields (as of the terminal year) if Mike sells the 345DL at the end of 20X5 for $230,476

Consider an asset that costs $601,119 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 $184,314. If the relevant tax rate is 0.27, what is the aftertax cash flow from the sale of this asset?

Your facility is undergoing a major expansion, which will require significant capitalinvestment into new machinery. The total cost of the machinery will be $7.2 Million, and theywill be purchased outright immediately. This machinery is considered a 7-year MACRSasset. However, you expect to use it for only six years before selling it for $1.5 Million. How much should the company deduct from their taxable income for depreciation expensesin year 3 for this machinery?a. $1,259,280b. $996,930c. $1,028,571d. $1,200,000

(Capital gains tax) The J. Harris Corporation is considering selling one of its old assembly machines. The machine, purchased for $30,000 5 years ago, had an expected life of 10 years and an expected salvage value of zero. Assume Harris uses simplified straight-line depreciation (depreciation of $3,000 per year) and could sell this old machine for $35,000. Also assume Harris has a 34 percent marginal tax rate. a. What would be the taxes associated with this sale? b. If the old machine were sold for $25,000, what would be the taxes associated with this sale? c. If the old machine were sold for $15,000, what would be the taxes associated with this sale? d. If the old machine were sold for $12,000, what would be the taxes associated with this sale? a. If the old machine were sold for $35,000, there would be $ (...) (Round to the nearest dollar and select from the drop-down menu.)