Required information. [The following information applies to the questions displayed below.) In December of 20x4, Atlas Chemical Corporation sold a forklift for $9,255. The machine was purchased in 20x1 for $50,000. Since then $38,845 in depreciation has been recorded on the forklift. 3. Determine the after-tax cash flow at the time the forklift was sold. The firm's tax rate is 31 percent. After-tax cash flow Check my work

Required information. [The following information applies to the questions displayed below.) In December of 20x4, Atlas Chemical Corporation sold a forklift for $9,255. The machine was purchased in 20x1 for $50,000. Since then $38,845 in depreciation has been recorded on the forklift. 3. Determine the after-tax cash flow at the time the forklift was sold. The firm's tax rate is 31 percent. After-tax cash flow Check my work

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The following data applies to the next 3 questions. A machine costs $16,000 and is expected to produce profit before depreciation of $5,000 in each of years 1 and 2, and $6,000 in each of years 3 and 4. Assume that the machine is depreciated at a constant rate of $4,000 a year and that there are no taxes. How much are the average accounting earnings? $1,000 B $1,250 C) $1,500 $1,750 E) $2,000
Need help with this Question
A firm purchased $62,800 of fixed assets two years ago. The company no longer needs these assets so it is going to sell them today for $28,500. The assets are classified as five-year property for MACRS. The MACRS rates are .2, .32, .192, .1152, .1152, .0576, for Years 1 to 6, respectively. What is the net cash flow from this sale if the firm's tax rate is 23 percent and no bonus depreciation is taken? $29,281.04 $26,576.00 $28.878.12 $27,516.60 O $29,648.12
Talia’s Tutus bought a new sewing machine for $90,000 that will be depreciated over 5 years using double-declining-balance depreciation with a switch to straight-line. a. Find the depreciation charge each year. b. If the sewing machine is sold after 2 years for $55,000, what will be the after-tax proceeds on the sale if the firm’s tax bracket is 35%?
The tax rate of the company is 55% and it uses straight line method of depreciation. The Question. 3. A company is considering an investment proposal to install a estimated cash flows before tax (CFBT) are 10,000; 11,000; 14,000; 15,000 and v machinery. The project will cost 50,000 with life of 5 years and no salvage value. new 25,000 during years 1,2,3,4 and 5 respectively. Compute: (i) Average rate of return. (ii) NPV at 10% discount rate. (iii) Profitability Index at 10% discount rate. Note : Discount factors at 10% are 0.909, 0.826, 0.751, 0.683 and 0.621 for the years 1,2,3,4 and 5.
Six years ago, ABC Company invested $45,525 in a new machinery. The investment in net working capital was $5,065 which would be recovered at the end of the project. Today, ABC Company is selling the machinery for $19,722. Today, the book value of the machinery is $12,039. The tax rate is 27 percent. What are the terminal cash flows in Year 6?
Blue Company, is trying to assess the feasibility of acquiring an accounting system for $10,000,000. The system is expected to reduce its salary cash expense by $2,000,000 per year. The system has a five-year life, it will be depreciated on a straight-line basis with no salvage value. Cost of capital is 15%. It is subject to 30% tax. (Present value factors should be rounded to four decimal places.)- What is the net present value of the investment. (Round to the nearest whole dollar.) - What is the profitability index of the investment. (Round to two decimal places)
A firm purchased $120,000 worth of light general-purpose trucks. The operations of the trucks lead to annual income of $60,000 for years 1~4. These trucks were then sold for $20,000 at the end of year 4. Assume a 30% combined tax rate. With a 40% bonus depreciation plus MACRS depreciation, do the following. (a) Calculate the before-tax IRR. (b) Calculate the after-tax IRR.
Assume a machine was purchased 5 years ago for $800,000 and has been 75% depreciated. The firm decides to sell this machine for $350,000. The firm's tax rate is 20%. Calculate how much net cash the sale of this equipment will generate for the firm. Answer rounded to the nearest whole dollar; for example 42,345 for your answer.
A dynamic measurement machine used by Renshaw Instruments had an annual cash flow before taxes of $550,000 over its life of 10 years. Its first cost was $1.7 million, it was straight-line depreciated with n = 10 years, and it was sold today for the estimated salvage of $200,000. The company’s Te = 36% and after-tax MARR = 15%. Was the purchase and use of the machine economically justified?
You work for Tamimi Industries, which purchased robotics equipment for $430,000 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 23% and the actual cash flow and depreciation amounts are shown. Year GI, $ Expenses, $ Depreciation, $ 1 250,000 −120,000 100,000 2 280,000 −120,000 160,000 3 200,000 −122,000 96,000 4 260,000 −124,000 57,600 5 260,000 −126,000 57,600 6 180,000 −128,000 28,800 EBIT is calculated for years 1 to n and includes the P or S amounts. Group startsTrue or False
Grove Media plans to acquire production equipment for $845,000 that will be depreciated for tax purposes as follows: year 1, $329,000; year 2, $189,000; and in each of years 3 through 5, $109,000 per year. A 10 percent discount rate is appropriate for this asset, and the company’s tax rate is 20 percent. Required: Compute the present value of the tax shield resulting from depreciation. 2. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($169,000 per year).