Suppose you sell a fixed asset for $312,000 when its book value is $102,000. If your company’s marginal tax rate is 35 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?
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- Suppose you sell a fixed asset for $115,000 when it's book value is $135,000. If your company's marginal tax rate is 21%, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)?Suppose you sell a fixed asset for $109,000 when its book value is $129,000. If your company’s marginal tax rate is 39 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? (Enter your answer as a whole number.)Suppose you sell a fixed asset for $110,000 when its book value is $130,000. If your company's marginal tax rate is 21 percent, what will be the effect on cash flows of this sale (i.e., what wilIl be the after-tax cash flow of this sale)? (Enter your answer as a whole number.)
- Suppose you sell a fixed asset for $10,000 when its book value is $2,000. If your company's marginal tax rate is 21 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? I don't understandAssume Lasher’s Kitchen has pretax earnings of $150,000 after depreciation expense of $30,000. If the firm’s tax rate is 25 percent, what is its cash flow from operations? Round your answer to the nearest dollar. $Assume that a company wants to incorprate the effect of taxes into their NPV analysis. The tax rate is 30%. In year 0, they would sell an old machine for the market value of $50,000. The current book value of this machine is $40,000. Note that cash flows in later years are unimportant for answering this question. Explain how the pre-tax cash inflow from the disposal in year 0, i.e., the $50,000, would be affected by the presence of taxes compared to the absence of taxes. It is sufficient if you indicate the direction of the change and explain why it would be the case.
- What's the rate of return you would earn if you paid $2,880 for a perpetuity that pays $65 per year? X-1 Corp's total assets at the end of last year were $425,000 and its EBIT was $52,500. What was its basic earning power (BEP) ratio?An investor owns a property that produces an NOI of $110,000 and has an annual debt service of $70,000 and the forecast of cost recovery and interest deductions are $38,427 and $58,593 respectively. The investor’s marginal tax rate is 35 percent. The investor’s projected cash flow after taxes is: A. $30,000 B. $35,457 C. $43,256 D. $25,821The Berndt Corporation expects to have sales of 12 million. Costs other than depreciation are expected to be 75% of sales, and depreciation is expected to be 1.5 million. All sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndts federal-plus-state tax rate is 40%. Berndt has no debt. a. Set up an income statement. What is Berndts expected net income? Its expected net cash flow? b. Suppose Congress changed the tax laws so that Berndts depreciation expenses doubled. No changes in operations occurred. What would happen to reported profit and to net cash flow? c. Now suppose that Congress changed the tax laws such that, instead of doubling Berndts depreciation, it was reduced by 50%. How would profit and net cash flow be affected? d. If this were your company, would you prefer Congress to cause your depreciation expense to be doubled or halved? Why?
- A firm will report annual Net Income of $50 and depreciation expense of $20 forever in the future. With a tax rate of 30%, how much is the present value of all future “tax shields”? Assume r = 4%.Assume that a farmer has $223,500 in Total Assets and $90,500 in Liabilities, faces 20% income tax rate, and 15% consumption rate. Further, assume that the interest rate is 10.5%. What is the rate-of-return on assets if the growth rate is 9.5%?(gnore income taxes in this problem.) Your Company is considering an investment that has the following data: Year 2 5 Investment $20,000 Cash inflow $12,000 $12,000 $15,000 $4,000 $4,000 In what year does the payback period for this investment occur? Year 2. Year 3. Year 4. Year 5.