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Sharpe Machining Company purchased industrial tools costing $100,000, which fall in the 3-year property class under MACRS. Use Appendix A and Exhibit 16-9 for your reference. Note: Use appropriate factor(s) from the tables provided. Required: 1. Prepare a schedule of depreciation deductions assuming: a. The firm uses the accelerated depreciation schedule specified by MẶCRS. b. The firm uses the optional straight-line depreciation method and the half-year convention. 2. Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Reg 2 Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe. Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Note: Round your final answers to the nearest dollar amount. Under MACRS Accelerated depreciation Under MACRS Straight-line depreciation Present Value of Depreciation Tax Shield $ S < 10 36,184 37,290 < Prev Next > Che

Sharpe Machining Company purchased industrial tools costing $100,000, which fall in the 3-year property class under MACRS. Use Appendix A and Exhibit 16-9 for your reference. Note: Use appropriate factor(s) from the tables provided. Required: 1. Prepare a schedule of depreciation deductions assuming: a. The firm uses the accelerated depreciation schedule specified by MẶCRS. b. The firm uses the optional straight-line depreciation method and the half-year convention. 2. Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Reg 2 Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe. Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Note: Round your final answers to the nearest dollar amount. Under MACRS Accelerated depreciation Under MACRS Straight-line depreciation Present Value of Depreciation Tax Shield $ S < 10 36,184 37,290 < Prev Next > Che

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sharpe Machining Company purchased industrial tools costing $100,000, which fall in the 3-year property class under MACRS. Use Appendix A and Exhibit 16-9 for your reference.. Note: Use appropriate factor(s) from the tables provided. Required: 1. Prepare a schedule of depreciation deductions assuming: a. The firm uses the accelerated depreciation schedule specified by MACRS. b. The firm uses the optional straight-line depreciation method and the half-year convention. 2. Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Note: Round your final answers to the nearest dollar amount. Req 2 Under MACRS Accelerated depreciation Under MACRS Straight-line depreciation Present Value of Depreciation Tax Shield $ S < Reg 10 36,184 37,290 < Prev Reg 2 Next > Che
Transcribed Image Text:Sharpe Machining Company purchased industrial tools costing $100,000, which fall in the 3-year property class under MACRS. Use Appendix A and Exhibit 16-9 for your reference.. Note: Use appropriate factor(s) from the tables provided. Required: 1. Prepare a schedule of depreciation deductions assuming: a. The firm uses the accelerated depreciation schedule specified by MACRS. b. The firm uses the optional straight-line depreciation method and the half-year convention. 2. Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Calculate the present value of the depreciation tax shield under each depreciation method listed in requirement 1. Sharpe Machining Company's after-tax hurdle rate is 12 percent, and the firm's tax rate is 30 percent. Note: Round your final answers to the nearest dollar amount. Req 2 Under MACRS Accelerated depreciation Under MACRS Straight-line depreciation Present Value of Depreciation Tax Shield $ S < Reg 10 36,184 37,290 < Prev Reg 2 Next > Che
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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