Tinney & Smyth Inc. is considering the purchase of a new batch polymer-bonding machine for producing Crazy Rubber, a new children's toy. The machine will increase EBITDA by $215,000 per year for the next two years. The machine's purchase price is $260,000 and the salvage value at the end of two years is $46,800. The machine is classified as 3-year property with MACRS depreciation rates for the first two years of 33.33% and 44.45%. What is the tax on sale associated with selling the machine after two years? Use a tax rate of 35 %. Round to the nearest dollar.
Q: Exercise 6-15 (Algo) Approaches for estimating stand-alone selling prices [LO6-6] Video Planet (VP)…
A: The selling price is the price that the consumer readily agrees to pay to the seller in return for…
Q: Nvidia Corporation, a global technology company located in Santa Clara, California, reported the…
A: A financial statistic called the asset turnover ratio assesses how effectively a business produces…
Q: Hawkeye Co. needs to complete its November 30th bank reconciliation. The following information is…
A: It is a document that help the company matches the bank transactions with its own records at the end…
Q: assets (at fair value) sion expense ected benefit obligation ual contribution to plan umulated OCI…
A: Projected benefit obligation for 2026 = $2,411,000 Plan asset (at fair value) for 2026 =…
Q: Ling Ltd operates a defined benefit pension scheme for all of its employees. The closing balances on…
A: A defined benefit pension scheme is a type of retirement plan where the employer promises to pay a…
Q: The stockholders' equity section of Ironworks is presented here. IRONWORKS Balance Sheet (partial)…
A: Net income is the amount of money earned by the entity after deducting all the expenses from the…
Q: Your client wants to purchase a residence for his aging parents, while minimizing the burden of…
A: There are many taxess Types of taxes are:- Income tax Gift tax Service tax Corporate tax Excise…
Q: On January 15, Tundra Co. sold merchandise to customers for cash of $52.000 (cost $35,500)…
A: “Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: Customer three found a hair in their taco. To make up for it, you gave 40% off their order, but they…
A: Answer:- Sales tax meaning:- The government levies a consumption tax known as a sales tax on the…
Q: Marigold Corp. produced 214000 units in 90000 direct labor hours. Production for the period was…
A: Flexible budgets represent the budgeted costs actual level of activity. Therefore flexible budget…
Q: Yarra Fabrication estimates that its manufacturing overhead will be $2,310,400 in year 1. It further…
A: Overheads means all type of indirect costs ans expenses being incurred in business for production or…
Q: Which of the following BEST (select one) describes why auditing can be viewed as a continuous…
A: Auditing is a critical process that helps companies ensure that their financial statements and…
Q: Prepare the statement of cash flows of Red, Incorporated, for the year ended December 31, 2024,…
A: A direct method is also used for the preparation of cash flow statement in which a simple cash in…
Q: THIS SOCI IS WRONG PLEASE PREPARE THE RIGHT ONE
A: Given in the question: Income tax expense has been shown on the other general expenses which is as…
Q: Puget Sound Divers is a company that provides diving services such as underwater ship repairs to…
A: Variable costs are costs that varies with the change in the level of output whereas fixed costs are…
Q: the financial statements for Clear Transmissions Company are provided below. CLEAR TRANSMISSIONS…
A: The cash flow statement is prepared to record the cash flow from various activities during the…
Q: Gemstone Distributors reports net income of $60,000. Included in that number is depreciation expense…
A: A CFS (cash flow statement) is one of the financial statements that shows the flows (both inflows…
Q: On January 1, 2021, the Mason Manufacturing Company began construction of a building to be used as…
A: Under this method, the borrowings are specifically charged to the assets for which it has been…
Q: While planning a specific audit, the PRIMARY purpose of assessing risks of the area under review is…
A: Audit is the process of checking and reviewing books of accounts that these are reflecting true and…
Q: Corp makes flashlights and is considering raising the price by 75 cents a unit for the coming year.…
A: Lets understand the basics. Management needs to make decision to change either price structure or…
Q: The income statement for Bonita Company showed cost of goods sold of $81,800 and operating expenses…
A: Cash flow statement :— It is one of the financial statement that shows change in cash and cash…
Q: The variable operating cost consists of gasoline, oil, tires, maintenance, anc the car will have…
A: Cost drivers are the activities or factors that cause costs to be incurred in a business. In…
Q: Alyeska Services Company, a division of a major oil company, provides various services to the…
A: ROI or rate on investment is used for measuring the profitability as well as the efficiency of the…
Q: Variable overhead Fixed overhead Total manufacturing costs 70,200 Overhead controllable variance $…
A: The overhead variance shows the difference between the applied and actual overhead on the basis of…
Q: Carlberg Company has two manufacturing departments, Assembly and Painting. The Assembly department…
A: Under weighted average method, cost per equivalent unit is calculated by adding the beginning work…
Q: An IT auditor is performing a test of the company's user access administration process, and has…
A: Auditors are the professionals who check each detail furnished by the client through his/her…
Q: Required information [The following information applies to the questions displayed below.] The…
A: Income statement is the financial statement that records all the income and expenses of the business…
Q: To yield a real risk-free rate, r*, equal to 2 percent, what would the average nominal rate be on a…
A: The real interest rate has been given in the question which is 2% The nominal interest rate is the…
Q: there are 11 total entries for this question
A: Journal entry refers to recording and classyfing of business transaction into books of accounts…
Q: FURY produces and sells skateboards. Its contribution margin income statement follows. Contribution…
A: It is a document that shows the contribution margin after subtracting all the variable expenses from…
Q: Felipe's Mexican Restaurant incurred salaries expense of $70,000 for 2024. The payroll expense…
A: The payroll expenses are paid by employers to their employees. The payroll expense includes the…
Q: Alyeska Services Company, a division of a major oil company, provides various services to the…
A: Ratios are used to evaluate the performance of the organization and also allow to compare past…
Q: Rudd Clothiers is a small company that manufactures tall-men's suits. The company has used a…
A: Standard costing is the cost the company expects would be incurred for direct materials, direct…
Q: Segment Contribution Margin Analysis The operating revenues of the three largest business segments…
A: Contribution margin is difference between selling price and variable cost. Contribution margin ratio…
Q: Which of the following is not included in a vulnerability chart? a. Internal controls that a company…
A: An organization or system's potential risks and vulnerabilities can be found and analyzed using a…
Q: The principal and interest are to be paid by making annual payments in the amount of $62,363.…
A: Borrowed amount = $270,000 Time = 5 years Interest paid = annually Rate of interest = 5% Cash paid…
Q: Assume a business provided the following excerpts from its balance sheet and income statement as…
A: Common size income statement is one of the financial statement being prepared for analysis. Under…
Q: Bloomin' Brands, Incorporated is the corporation behind five restaurant chains: Outback Steakhouse,…
A: Gross Margin :— It is the difference between sales and cost of goods sold. Gross margin percentage…
Q: bonds is accounted for in the general fund. A credit balance in the Fund balance – Unreserved,…
A: A liability is an obligation or debt that an entity owes to another party as a result of a past…
Q: Exercise 11-30 (Algo) Impairment; property, plant, and equipment [LO11-8] General Optic Corporation…
A: Impairment loss=Book value-Estimated fair value Book value=Cost-Accumulated depreciation
Q: What does FICA stand for? (for accounting)
A: As per this Act, Certain deductions must be taken from employee pay and deposited in government…
Q: Whispering Winds Company's budgeted sales and direct materials (DM) purchases are as follows…
A: Budgeted cash receipts means the amount of money expected to be collected by the entity during a…
Q: Adjustment Provision for bad debts must be reduced by R3 000. In this case Provision for bad debts…
A: Provision for bad debts is a balance sheet account that represents the estimated amount of accounts…
Q: efining and Extraction. The comp
A: Extraction Variable cost = $13 per barrel Fixed cost = $6 per barrel Full cost = $13+$6 = $19 per…
Q: Use the following informa answer the questions bela
A: There are four important for terms in the stock market for any stock i.e., high, low, open and close…
Q: Chicken Coop Manufacturing, The. master budget for 2023 as follows: Expected annual operating…
A: variable cost per direct labor hour = total variable cost / number of Direct labor hours…
Q: (a1) Compute the various ratios for each company. Assume that the ending account balances are…
A: Ratio analysis is one of the financial analysis which includes analysis of the financial statements…
Q: show excel work please all solve question please
A: The value of a corporation's accounts receivable is decreased using the contra-asset account known…
Q: At December 31, MediAssist Precision Instruments owes $58,000 on Accounts Payable, Salaries Payable…
A: Balance sheet is the financial statement that records all the assets, liabilities and stockholders'…
Q: A zero coupon bond with a face value of $800,000 is issued on January 1, Year One. It will mature in…
A: The bonds payable are the long term liabilities of the business. The bonds are issued at discount…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given here. The company’s cost of capital is 10%. Should the firm operate the truck until the end of its 5-year physical life? If not, then what is its optimal economic life? Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?Depreciation Jensen Inc., a graphic arts studio, is considering the purchase of computer equipment and software for a total cost of $18,000. Jensen can pay for the equipment and software over three years at the rate of $6,000 per year. The equipment is expected to last 10 to 20 years, but because of changing technology, Jensen believes it may need to replace the system in as soon as three to five years. A three-year lease of similar equipment and software is available for $6,000 per year. Jensens accountant has asked you to recommend whether the company should purchase or lease the equipment and software and to suggest the length of time over which to depreciate the software and equipment if the company makes the purchase. Required Ignoring the effect of taxes, would you recommend the purchase or the lease? Why or why not? Referring to the definition of depreciation, what appropriate useful life should be used for the equipment and software?Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?
- Alfredo Company purchased a new 3-D printer for $900,000. Although this printer is expected to last for ten years, Alfredo knows the technology will become old quickly, and so they plan to replace this printer in three years. At that point, Alfredo believes it will be able to sell the printer for $15,000. Calculate yearly depreciation using the double-declining-balance method.Ralph's Bow Works (RBW) is planning to add a new line of bow ties that will require the acquisition of a new knitting and tying machine. The machine will cost $1.8 million. It is classified as a 7-year MACRS asset and will be depreciated as such. Interest costs associated with financing the equipment purchase are estimated to be $30,000 per year. The expected salvage value of the machine at the end of 15 years is $60,000. The decision to add the new line of bow ties will require additional net working capital of $45,000 immediately, $15,000 at the end of year 1, and $15,000 at the end of year 2. RBW expects to sell $280,000 worth of the bow ties during each of the 15 years of product life. RBW expects the sales of its other ties to decline by $15,000 (in year 1) as a result of adding this new line of ties. The lost sales level will remain constant at $15,000 over the 15-year life of the proposed project. The cost of producing and selling the ties is estimated to be $40,000 per year.…Ralph’s Bow Works (RBW) is planning to add a new line of bow ties that will require the acquisition of a new knitting and tying machine. The machine will cost $1.3 million. It is classified as a 7-year MACRS asset and will be depreciated as such. Interest costs associated with financing the equipment purchase are estimated to be $50,000 per year. The expected salvage value of the machine at the end of 10 years is $80,000. The decision to add the new line of bow ties will require additional net working capital of $55,000 immediately, $30,000 at the end of year 1, and $10,000 at the end of year 2. RBW expects to sell $370,000 worth of the bow ties during each of the 10 years of product life. RBW expects the sales of its other ties to decline by $23,000 (in year 1) as a result of adding this new line of ties. The lost sales level will remain constant at $23,000 over the 10-year life of the proposed project. The cost of producing and selling the ties is estimated to be $70,000 per year.…
- Ralph’s Bow Works (RBW) is planning to add a new line of bow ties that will require the acquisition of a new knitting and tying machine. The machine will cost $1.4 million. It is classified as a 7-year MACRS asset and will be depreciated as such. Interest costs associated with financing the equipment purchase are estimated to be $45,000 per year. The expected salvage value of the machine at the end of 10 years is $90,000. The decision to add the new line of bow ties will require additional net working capital of $40,000 immediately, $15,000 at the end of year 1, and $10,000 at the end of year 2. RBW expects to sell $350,000 worth of the bow ties during each of the 10 years of product life. RBW expects the sales of its other ties to decline by $25,000 (in year 1) as a result of adding this new line of ties. The lost sales level will remain constant at $25,000 over the 10-year life of the proposed project. The cost of producing and selling the ties is estimated to be $70,000 per year.…Tucker Enterprise Inc. is considering a project that requires a numerically controlled (NC) machine for $28,000 (year 0) and plans to use it for five years, after which time it will be scrapped. The allowed depreciation deduction during the first year is $4,000 because the equipment falls into the seven-year MACRS property category. (The first-year depreciation rate is 14.29%.) The cost of the goods produced by this NC machine should include a charge for the depreciation of the machine. Suppose the company estimates the following revenues and expenses, including the depreciation for the first operating year:• Gross income = $50,000• Cost of goods sold = $20,000• Depreciation on the NC machine= $4,000• Operating expenses = $6,000Without the project, the company's taxable income from regular business operations amounts to $20 million, which places the company in the highest tax bracket of 35%. Compute the net income from the project during the first year.Tech Engineering Company is considering the purchase of a new machine. The new machine, which falls into the MACRS 5-year class, has an estimated life of 5 years, and it costs $40,000 to purchase the machine. Tech plans to sell the machine at the end of the fifth year for $12,000. Initial decrease in accounts payable = $3,000, which must be restored at the end of the project's life. The applicable depreciation rates are 0.20, 0.32, 0.19, 0.12, 0.11, and 0.06. The new machine is expected to generate before-tax cash savings of $13,000 per year. The company's tax rate is 30%. What is the year 5 total free cash flow of the proposed project? Group of answer choices $24,540 $32,540 $22,540 $27,540 $29,540
- Larson Manufacturing is considering purchasing a new injection-molding machine for $250,000to expand its production capacity. It will cost anadditional $20,000 to do the site preparation. Withthe new injection-molding machine installed, Larson Manufacturing expects to increase its revenueby $90,000. The machine will be used for five years,with an expected salvage value of $75,000. At aninterest rate of 12%, would the purchase of the injection-molding machine be justified?Nguyen Inc. is considering the purchase of a new computer system (ICX) for $110,000. The system will require an additional $20,000 for installation. If the new computer is purchased it will replace an old system that has been fully depreciated. The new system will be depreciated over a period of 8 years using straight-line depreciation. If the ICX is purchased, the old system will be sold for $10,000. The ICX system, which has a useful life of 8 years, is expected to increase revenues by $34,000 per year over its useful life. Operating costs are expected to decrease by $3,000 per year over the life of the system. The firm is taxed at a 40 percent marginal rate. Round your answers to the nearest dollar. What net investment is required to acquire the ICX system and replace the old system? $ Compute the annual net cash flows associated with the purchase of the ICX system. $Commercial Hydronics is considering replacing one of its larger control devices. A new unit sells for $29,000 (delivered). An additional $3,000 will be needed to install the device. The new device has an estimated 20-‐year service life. The estimated salvage value at the end of 20 years will be $2,000. The new control device will be depreciated as a 7-‐year MACRS asset. The existing control device (original cost = $15,000) has been in use for 12 years, and it has been fully depreciated (that is, its book value equals zero). Its scrap value is estimated to be $1,000. The existing device could be used indefinitely, assuming the firm is willing to pay for its very high maintenance costs. The firm’s marginal tax rate is 40 percent. The newcontrol device requires lower maintenance costs and frees up personnel who normally would have to monitor the system. Estimated annual cash savings from the new device will be $9,000. The firm’scost of capital is 12 percent. Evaluate the relative merits…