The partners agreed to dispose of an old pick-up truck with a net book value of $350,000 for $400,000. The pick-up had a tax written down value of $300,000. Calculate the Capital Allowance using the rate in Jamaica
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The partners agreed to dispose of an old pick-up truck with a net book value of $350,000
for $400,000. The pick-up had a tax written down value of $300,000.
Calculate the Capital Allowance using the rate in Jamaica
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- Shell Camping Gear, , is considering two mutually exclusive projects. Each requires an initial investment of $100,000. John Shell, president of the company, has set a maximum payback period of 4 years. The after-tax cash inflows associated with each project are shown in the following table. Because they are mutually exclusive, Shell must choose Which should the company invest in?A project has the following net profit after tax set out below. The average book value of the assets in the project is 131,028. What is the accounting rate of return of this project? Enter your final answer in decimals to four decimal places (e.g., if your answer is 5.55%, then enter 0.0555). Year Net Profit After Tax 1 5,097 2 7,365 3 8,627 4 10,946You have entered into an agreement for the purchase of land. The agreement specifies that you will take ownership of the land immediately. You have agreed to pay $51, 000 today and another $51,000 in three years. Calculate the total cost of the land today, assuming a discount rate of (a) 2%, (b) 4%, or (c) 6%.
- You purchase a two acre office park for $5,000,000. Calculate the depreciation that you can deduct when estimating your annual tax liability if 75% of purchase price is allocated to depreciable real property. What if the property was an apartment complex?ABC is considering investing in two machines; Machine A and Machine B with initial investments of $4,000,000 and $5,000,000 respectively. Each project is expected to have a life of five (5) years. The after tax profits generated by the projects are as follows: Machine A Machine B After tax profits $ $ Year 1 1 000 000 1 400 000 Year 2 1 200 000 1 500 000 Year 3 1 300 000 1 600 000 Year 4 1 200 000 1 400 000 Year 5 1 000 000 1 200 000 Required: Calculate the accounting rate of return (ARR) on average capital.ABC is considering investing in two machines; Machine A and Machine B with initial investments of $4,000,000 and $5,000,000 respectively. Each project is expected to have a life of five (5) years. The after tax profits generated by the projects are as follows: Machine A Machine B After tax profits $ $ Year 1 1 000 000 1 400 000 Year 2 1 200 000 1 500 000 Year 3 1 300 000 1 600 000 Year 4 1 200 000 1 400 000 Year 5 1 000 000 1 200 000 Required: Calculate the average profit for each project.
- Four years ago, an investor purchased a five door-apartment for P5.5M. Income from rent exceeded maintenance and insurance cost by P480,000.00 per year. If the property is sold now for P7.55M with an 8.25% income tax charged from capital gain determine the after tax-rate of return realized on the investment.Ans: 14%Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. a. Campbell Manufacturing is considering the purchase of a new welding system. The cash benefits will be $480,000 per year. The system costs $2,150,000 and will last 10 years. b. Evee Cardenas is interested in investing in a women's specialty shop. The cost of the investment is $280,000. She estimates that the return from owning her own shop will be $40,000 per year. She estimates that the shop will have a useful life of 6 years. c. Barker Company calculated the NPV of a project and found it to be $63,900. The project's life was estimated to be 8 years. The required rate of return used for the NPV calculation was 10%. The project was expected to produce annual after-tax cash flows of $135,000. Required: 1. Compute the NPV for Campbell Manufacturing, assuming a discount rate of 12%. If required, round all present value calculations to the nearest dollar. Use the minus sign to indicate a…ABC is considering investing in two machines; Machine A and Machine B with initial investments of $4,000,000 and $5,000,000 respectively. Each project is expected to have a life of five (5) years. The after tax profits generated by the projects are as follows: Machine A Machine B After tax profits $ $ Year 1 1 000 000 1 400 000 Year 2 1 200 000 1 500 000 Year 3 1 300 000 1 600 000 Year 4 1 200 000 1 400 000 Year 5 1 000 000 1 200 000 Required: Calculate the average capital for each project
- Dickens Corp wants to buy a 100-acre tract of land. The owner will sell it for a cash price of $175,000, but Dickens offered to pay for the land in five annual installments of $40,000 each, the first one is due at the end of one year. Find the cost of capital for Dickens the two prices to be equivalent.You have entered into an agreement for the purchase of land. The agreement specifies that you will take ownership of the land immediately. You have agreed to pay $35,000 today and another $35,000 in three years. Calculate the total cost of the land today, assuming a discount rate of (a) 3%, (b) 5%, or (c) 7%. (FV of $1. PV of $1. FVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) a. b. C Payment Amount $ 35,000 35,000 35,000 Interest Rate 3% 5% 7% Compounding Annually Annually Annually Period Due 3 years 3 years 3 years Total Cost of Land TodayA municipality decides to purchase a small collection truck that has an expected life of 10 years of Rs. 590,000. Cost of truck is to be borrowed from the local bank and to be paid back in 10 annual payments. Determine the annual instalments on this capital expense if the interest rate is 6.125 %