To keep track of customers' behavior, a grocery store chain invests $75,000 in a CRM system. This new system is treated as a seven-year MARCS property for tax purposes. The system's life-span is six years, and at the end of the six years, the expected salvage value is $5,500. (i) What is the depreciation allowance for the forth year of use? (ii) What is the depreciation allowance for the sixth year of use? A) (i) $9,367.5, (ii)$3,345.0 B) (i) $9,367.5, (ii)$6,690.0 C) (i) $8,680.6, (ii)$3,099.7 D) Answers A, B and C are not correct

You invested on a special pizza oven for $150,000. This commercial oven is depreciated over a 7-year period, and it is expected to have a $20,000 estimated market value at the end of the 7 years. Using the straight-line method, what is the book value in year 5? a) Between $31,900 and $32,300 b) Between $45,500 and $45,900 O c) Between $33,000 and $33,400 d) None of the answers are correct e) Between $58,300 and $58,700 f) Between $56,900 and $57,300

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Your company is contemplating the purchase of a large stamping machine. The machine will cost $167,000. With additional transportation and installation costs of $5,000 and $11,000, respectively, the cost basis for depreciation purposes is $183,000. Its MV at the end of five years is estimated as $34,000. The IRS has assured you that this machine will fall under a three year MACRS class life category. The justifications for this machine include $45,000 savings per year in labor and $29,000 savings per year in reduced materials. The before-tax MARR is 24% per year, and the effective income tax rate is 28%. Assume the stamping machine will be used for only three years, owing to the company's losing several government contracts. The MV at the end of year three is $47,000. What is the income tax owed at the end of year three owing to depreciation recapture (capital gain)? E Click the icon to view the GDS Recovery Rates (rg) for the 3-year property class. Choose the correct answer below. O…

Economics A company purchased a piece of equipment for $175,000 and sells it after 3 years. The equipment is depreciated by the MACRS method using a five-year period. The annual maintenance cost of the equipment is $3,000. If the equipment is sold at end of 3 years for a value of $100,000, what will be the taxes that has to be paid from the sale of the equipment? Assume that the tax rate is 35%. O $6790 O $11480 O $8136 O No taxis to be paid

Consider an asset that costs $420,000 and is depreciated straight-line to zero over a 7-year economic life. What is the after-tax salvage value if the asset is sold after 4 years for $240,000 and the corporate tax rate is 22%.

A piece of equipment costs ₱354,000 including shipping, installation and taxes. The supplier assures a salvage value of ₱24,000 after 20 years. Using the Sum-of-the-Years Digits method, what is the depreciation charge during the 5th year?

Jake the Dog Inc. is investing in a new portable iguana killing machine that will cot 1pts $210,000. The machine has a useful life of 6 years and falls into the 5-year property class for the depreciation purposes. The IRS MACRS schedule for the six years is () 20%, (2) 32%, (3) 19.2 % ( 4 ) 115256, (5) 1152 %, (6)5.7653%.It will generate $50000 per Time R Aberdt year of savings for Jake and can be sold for $50,000 at the end of the 6-year period Jake's corporate tax rate is 32% In addition, Jake has 2000 outstanding 9% annual 45 Min 24/7P Coupon bonds with a $ 1000 oar value, 20 years to maturity and a price of $1085 Jalke also has 80,000 sráres of semmon stock outstanding that is selling for $45 per share This stock has a teta di 225(lis Jakel heis arisky dog-dude!), the expected market return is 1295 and the fisk-free rate ls 5% Finally, Jake has 36,000 shares preferred stock outstanding that pays a 3.5% dividend and sells for $40 per share. Using the WACC and the OCF's what…

A taxpayer wants to place in service a $10,000 asset that is assigned to the five-year class. Compute the MACRS percentages and the depreciation amounts for the asset. Given: Five-year asset, half-year convention, \alpha =40% and S=0 Find: MACRS depreciation percentages Dn for $10,000 asset.

A company purchases new cement manufacturing assets that cost $15 million. This is classified in the 15-year property class using MACRS-GDS. What would be the depreciation allowance and book value at the end of years 1 and 3 using MARS with 50% bonus depreciation? a) Depreciation allowance at the end of year 1: b) Book value at the end of year 3 c)Depreciation allowance at the end of year 1: d) Book value at the end of year 3