Two years ago Argo company purchased a ace generator that cost 300,000 I had to pay an additional 20,000 for delivery and installation and the investment generator require the firm to increase its working the generator which is being depreciated over the period of 10 years straight line depreciation has a current market value of 79,650 the firms marginal tax rate is 40% if the firm liquid is the asset for its current market value compute after tax proceeds from the sale of the asset your answer to the nearest dollar.

company is considering replacing an existing machine with a more modem one. Here are some of the details: The tax rate is 40%. Assume straight-line depreciation and a RRR of 10%. Assume the salvage value of the investment is equal to zero when calculating the Old Machine $1,000,000 (7 years ago) $1,500,000 $200,000 $300,000 S0 (3 years from now) New Machine Purchase Price $1,500,000 $1,500,000 $100,000 (10 years from now) depreciation charge. O Find the NPV Market Value Book Value Salvage Value associated with the project Age Original Life Yearly capacity 10 10 55,000 units S7/unit S100,000 90,000 units $7/units Sales Price Yearly expenses $90,000 Training expenses not applicable Inventory $30,000 $75,000 $55,000

A machine is purchased for $500,000 and is used through the end of Year 2. The machine falls under asset class 43 with a capital cost allowance (CCA) rate of 30%. At the end of Year 2, the machine is sold for $75,000. What is the present value of the lost CCA tax shields if the firm's marginal tax rate is 40% and its cost of capital is 5%? OA. $37,050 OB. $25,714 C. $15,180 D. $23,324 OE. $37,950

The Lumber Yard is considering adding a new product line that is expected to increase annual sales by $352,000 and expenses by $244,000. The project will require $153,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the 9-year life of the project. The company has a marginal tax rate of 21 percent. What is the depreciation tax shield? Multiple Choice O $20,145 $3,570 $8.213 $22.680 ER 540

EE printing is in the evaluation process for the acquisition of a new computer system. The total depreciable base (cost plus installation) is $170,000. The new equipment will increase Earnings before depreciation and taxes by $67,400 during years 1 to 3 and $30,000 during years 4 to 6. EE marginal tax rate is 40% and Cost of Capital is 11% Calculate the Payback Period PRESENT YOUR ANSWER ROUNDED TO O DECIMAL PLACES Reeniasta

A $76,000 machine with a 10-year class life was purchased 3 years ago. The machine will now be sold for $31,000 and replaced with a new machine costing $51,000, with a 5-year class life. The new machine will not increase sales, but will decrease operating costs by $ 16,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 34 percent. What is the initial outlay for the project? ALTHOUGH THE INITIAL OUTLAY IS NEGATIVE, PLEASE ENTER YOUR ANSWER AS A POSITIVE SIGN. IN OTHER WORDS, IF YOUR ANSWER IS-10,000, ENTER IT AS 10,000. DO NOT ENTER THE DOLLAR SIGN

A firm is evaluating an investment proposal to instal new milling machines. The project requires an initial investment of R 50000. The equipment has a lifespan of 5 years and no salvage value. The company operates under a tax rate of 55% and utilizes straight line depreciation. The estimated annual profits before depreciation from the investment are as follows: Year 1: 10000, Year 2: 11000, Year 3: 14000, Year 5: 15000 and year 5 R 25000. Compute the payback period and the Net Present Value at 10% discount rate, profit after tax for each year and the cash inflow for each year.

Plant Company is contemplating the purchase of a new piece of equipment for $39,000. Plant is in the 40% income tax bracket. Predicted annual after-tax cash inflows from this investment are $17,000, $14.000. $2.000, $9,000 and $6,000 for years 1 through 5, respectively. The firm uses straight-line depreciation with no residual value at the end of five years. Assume that the hurdle rate for accepting new capital investment projects for the company is 4%, after-tax. (Note: PV $1 factors for 4% are as follows: for year 1= 0.962, for year 2 = 0.925, for year 3= 0.889, for year 4 = 0.855. for year 5 = 0.822; the PV annuity factor for 4%, 5 years = 4.452.) At an after-tax discount rate of 4%, the estimated net present value (NPV) of the proposed investment is (rounded to the nearest hundred dollars): Multiple Cholce ($12,100) ($9.400). ($6.400). ($3.100). $4.700.

A $73,000 machine with a 8-year class life was purchased 5 years ago. The machine will now be sold for $35,000 and replaced with a new machine costing $55,000, with a 5-year class life. The new machine will not increase sales, but will decrease operating gosts by $16,000 per year. Simplified straight line depreciation is employed for both machines, and the marginal corporate tax rate is 34 percent. What is the initial outlay for the project? NOTE-- ALTHOUGH THE INITIAL OUTLAY IS NEGATIVE, PLEASE ENTER YOUR ANSWER AS A POSITIVE SIGN. IN OTHER WORDS, IF YOUR ANSWER IS 10,000, ENTER IT AS 10,000. DO NOT ENTER THE DOLLAR SIGN.

EE printing is in the evaluation process for the acquisition of a new computer system. The total depreciable base (cost plus installation) is $180,000. The new equipment will increase Earnings before depreciation and taxes by $60,000 during years 1 to 3 and $32,000 during years 4 to 6. EE marginal tax rate is 40% and Cost of Capital is 11% Calculate the Payback Period PRESENT YOUR ANSWER ROUNDED TO 2 DECIMAL PLACES