tes $40,000/year of revenue. The b

Use the spreadsheet to determine the after-tax internal rate of return. For this problem, assumea a 10 year analysis period, straight-line depreciation is used, 21% corporate tax rate , an initial cost of $ 200,000, an annual benefit of $60,000 and no salvage value but instead you must pay a disposal fee of $20,000 that your corporate accountant determined is tax deductible.

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.

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