If the depreciation tax shield is 40,000 due to tax rate declaration of 20%, what is the price of the machine if it has an expected life of 20 years and the money is worth 13% compounded annually? 1. Depreciation: (4 decimal places only)

If the depreciation tax shield is 40,000 due to tax rate declaration of 20%, what is the price of the machine if it has an expected life of 20 years and the money is worth 13% compounded annually? 1. Depreciation: (4 decimal places only)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Loan type Interest rate (per annum) 4.5% Bad-debt percentage Education 2.1% Home Car 1.6% 0.7% 1.9%…

A: A rate of return (RoR) is the flow of an asset over a certain time period expressed as a percentage…

Q: United Apparel has the following balances in its stockholders' equity accounts on December 31, 2024:…

A: Total Paid in Capital = Common Stock + Preferred Stock + Additional Paid in Capital Total…

Q: On October 31, 2021, Aaron, Nono and Enok who share earnings 5:3:2, respectively, decided to…

A: Liquidation means where the business of firm is closed down , assets are sold out and liabilities…

Q: The following selected transactions were completed during August of the current year: 1. Billed…

A: Introduction: Journals: Recording of a business transactions in a chronological order. Each and…

Q: A computer, printer, and copier were purchased for a total price of Php 250,000 on August 1, 2013.…

A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…

Q: DATE DETAILS UNITS COST PER UNIT 1 OPENING INVENTORY 20 R85 7 Purchases 23 R90 16 Purchases 33 R95…

A: Weighted average means that cost of inventory and cost of goods sold can be calculated by taking…

Q: The following information was extracted from the records of Lodh Ltd for the year ended 30 June…

A: A deferred tax liability is a balance-sheet item that indicates taxes that are owed but are not due…

Q: On January 1, 2023, Jones Corporation issued $2.982.000, 9%, 5- year bonds with interest payable on…

A: Interest expense is computed on issue price of bond and interest rate that should be used for…

Q: True or False 1. if a credit risk has not increased significantly since initial recognition, an…

A: As per the norms of Bartleby, in case of multiple sub parts being asked in a single question, the…

Q: Cost of Goods Sold Budget Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic…

A: Total budgeted manufacturing cost=Budgeted direct materials+Budgeted direct labor+Budgeted overhead

Q: INMANAC: Accounting Records and Systems Illustrative Problem: Computer King Company Balance Sheet…

A: 1. Income Statement 2. Balance Sheet The first statement shows the income earned and loss incurred…

Q: STI Co. acquired 55% of the outstanding shares of UE Inc on August 1, 2021 at a total cost of…

A: Non Controlling Interest For the calculation of non controlling interest the minority interest which…

Q: outstanding that ar

A: Stockholders are the Persons of entities whom the company issues its ownership rights in the form of…

Q: Indicate whether the breakeven point will increase or decrease based on the following change (each…

A: Break even point = Fixed costs /Contribution margin per unit where, Contribution margin per unit =…

Q: Palmgren Company produces consumer products. The sales budget for four months of the year is…

A: Note: Units produced = Total needed - Beginning inventory Total needed = Unit sales + Desired ending…

Q: Letecia Company leased an equipment from a lessor on January 1, 2020 under a lease with the…

A: Lease is a contract under which one party agrees to rent out the property to another party at a…

Q: Indicate whether the following items are treated as "Separately stated item" or "Nonseparately…

A: S corporation means closely held corporations that don't pay income tax themselves but act as a…

Q: The following data were gathered to use in reconciling the bank account of Photo Op: Balance per…

A: Introduction: BRS: BRS stands for Bank Reconciliation statement. To reconcile the difference between…

Q: Year 1 Year 2 YR 1 YR2 Sales (S) $ 614,405.00 $ 600,343.00 Cost…

A: Mark-up percentage refers to the percentage imposed on the cost of the product to have a profit by…

Q: List 5 REIT Regulations by IRS

A: A real estate investment trust (REIT) is a corporation that owns, operates, or funds…

Q: SELLING PRICE R116 UNITS IN OPENING INVENTORY 600 UNITS MANUFACTURED 2550 UNIT SOLD 3050…

Q: 4. If a higher ROE is desirable, why don't companies take on large amounts of debt? a. Additional…

A: Ans. A company's financial structure consists of debt and equity. Debt has to be repaid while equity…

Q: The following data were available for Nina School of Rock at Dec 31, 2022: Cash in bank - BPI (per…

A: Bank reconciliation statement is that statement which is prepared to reconcile cash balance as per…

Q: urrently has sales of P1,000,000 and its DSO is 30 days, the financial manager estimates that…

A: Due to increase in account receivable there is blockage of money and there will loss due to bad…

Q: Tamarisk Company uses special strapping equipment in its packaging business. The equipment was…

A: Loss on impairment = carrying value - Recoverable amount Where, Recoverable amount = Lower of fair…

Q: DO NOT INCLUDE COMMAS OR BO The Company acquired a machine on January 1, Year 1. The machine cost…

A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…

Q: Explain the difference between a fixed and flexible budget stating which one is more appropriate for…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: A company had the following amounts at the end of the year: Cash $ 11,200 Income Tax Expense 1,500…

A: Income statement: The income statement shows the company's revenues and expenses earned during the…

Q: Audio-2-Go, Inc., manufactures MP3 players. Models A-1, A-2, and A-3 are small and light. They are…

A: Sales forecast refers to the procedure of estimating the future revenue through predicting the…

Q: Forever Ready Company expects to operate at 90% of productive capacity during July. The total…

A: Fixed factory overhead cost is irrelevant because it will not increase for additional 2,000…

Q: Which of the following joumal entries would be recorded if a business makes a cash payment to a…

A: Introduction: Journals: Each and every business transactions are to be recorded in Journals.…

Q: FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high…

A: Lets understand the basics. Budget is a future estimation of profit and loss. Management first…

Q: OBJECTIVE 6 6 Exercise 6.22 Weighted Average Method, Equivalent Units, Unit Cost, Multiple…

A: In inventory accounting, the weighted average cost methodology is one of three methods for valuing…

Q: The journal entries required at Dec 31, 2022 includes:

A: Petty cash fund is the fund which is set by the company in order to make the payments from it for…

Q: A firm uses backflush costing on a direct costing basis. It incurs the following costs this period…

A: Cost of Goods sold (COGS) is the cost which is incurred by the company at the time of goods sold. It…

Q: Using the following information, prepare a bank reconciliation. • Bank balance: $4,021 • Book…

A: Introduction: Bank reconciliation statement: BRS stands for Bank Reconciliation statement. To…

Q: Berring Company produces two products: the deluxe and the standard. The deluxe sells for $40, and…

A: For Sales Budget, Units * Unit price = Sales For Production Budget Sales units + Desired ending…

Q: Question: How much is the income or loss after tax for 2021? Kindly prepare a good presentation of…

A: Answer:- Income after tax definition:- Income after tax or profit after tax, is that amount of…

Q: 4. A management accountant was working on a cash budget for Boone Company when he accidentally…

A: Budgeting - Budgeting is the process of estimating future operations based on past performance. %…

Q: On May 1, a commercial baking company purchased a commercial oven on account. The oven costs…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: Angelo Company decided to enter the leasing business. The entity acquired a specialized packaging…

A: Given information, Acquisition cost of the machine =P2,300,000 Residual value of the machine…

Q: Purchases Budget Tiger Drug Store carries a variety of health and beauty aids, including 500-count…

A: The number of units required to be purchased will be equal to Desired ending inventory Add number of…

Q: On January 1, 2023, Jones Corporation issued $2.982.000, 9%, 5- year bonds with interest payable on…

A: Interest expense is calculated on sale price of bond and interest rate that should be used for…

Q: Lieu Company is a specialty print shop. Usually, printing jobs are priced at standard cost plus 50…

A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: Using the following information: a. The bank statement balance is $3,759. b. The cash account…

A: Bank reconciliation is the process of comparing the balance in an entity's account account to the…

Q: (a) Compute the weighted-average accumulated expenditures on Phipps' new building during the…

A: Weighted average accumulated expenditure qualifying for capitalisation of interest cost: Date…

Q: MCDO corporation has 4000,000 ordinary shares outstanding and 500,000 outstanding preference shares…

A: Formula: Total dividend paid = Dividend paid to Common stockholders + Total Dividend paid to…

Q: Consider the following information for three stocks, Stock A, Stock B, and Stock C. The returns on…

A: GIVEN Consider the following information for three stocks, Stock A, Stock B, and Stock C. The…

Q: Nicholes Corporation finished job no. 600 on June 1. On June 10, the company sold job no. 600 for…

A: Under Job Costing each separate work is done under Separate Jobs. Under job Costing Cost of Goods…

Q: Directions: Prepare a schedule of cost of goods sold for the three-month period and a statement of…

A: Data from the accounts of Ken Merchandising for the one month period ended 31st March, 2020 is given…

Question

If the depreciation tax shield is 40,000 due to tax rate
declaration of 20%, what is the price of the machine
if it has an expected life of 20 years and the money
is worth 13% compounded annually?
1. Depreciation:
(4 decimal places
only)
2. Price:
(3 decimal places)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

K You have a depreciation expense of $546,000 and a tax rate of 22%. What is your depreciation tax shield? The depreciation tax shield will be $ (Round to the nearest dollar.)
Note: Give me solution in Excel otherwise leave it. Thank you What is the payback period at an interest rate of 10% per year for an asset with initial cost of $ 16,000 ; salvage value of $ 18,000 whenever it is sold and annual revenue of $ 2,000 per year?
An investment in a certain project can be recovered in 10 years. The investment has no salvage value. If the net income before taxes from this investment is P10,000 annually and income taxes are 20% each year, how much is the cost of investment if depreciation charges are P10,000 annually? P180,000 P100,000 P80,000 P150,000
This question is based on the following in formation: An investment is Machinery costing P 250,000 with a 4-year life and no salvage value is expected to produce the following net income after taxes of 30%: End of year 1 P 17,000 2 22,000 3 25,000 4 26,000 How much is the annual tax shield?How much is the annual tax shield?A. P 17,580B. P 17,850C. P 18,570D. P 18,750What is the ROI (using the cash income)? A. 6.3%B. 9%C. 31.3%D. 34%
• EXAMPLE: A new machine will be purchased for 150000 TL and sold for 30000 TL at the end of 5 years. An annual income of 75000 TL will be provided. Expected rate of return on investment • 40% Determine annual depreciation amount Analyze the pre-tax economics of the investment If • the income tax rate is 25%, analyze the after-tax economics of the investment
for this equipment. 0. Calculating Salvage Value Consider an asset that costs $635,000 and is depreciated straight-line to zero over its eight-vear tax life. The asset is to be used in a five-year project; at the end of the project, the asset can be sold for S105,000. If the relevant tax rate is 22 percent, what is the aftertax cash flow from the sale of this asset? LO 2
A firm buys a piece of equipment for $115,866.00 and will straight-line depreciate it to zero over five years. If the tax rate is 39.00%, what is the present value of the depreciation tax shield if the cost of capital is 10.00%? Submit Answer format: Currency: Round to: 2 decimal places. Show Hint
3. Suppose that the new equipment has a cost basis of $12,000 and a salvage value of $3,000 at the end of 6 years. This asset is depreciated by the Straight-Line method. The effective income tax rate is 40 % and the after-tax MARR ic = 10%. If the company is going to sell this asset after 3 years at the market value of $6,000, what is the minimum profit per year this asset should produce to breakeven the investment? (20%)
A project requires an increase of $2100 in Net Working Capital at the beginning of the project, which will be fully recovered after the completion of the project. Equipment with a book value of $11,000 will be sold at the end of the project for a salvage value of $6,000. The tax rate is 20%. What is the incremental free cash flow in the year following the end of the project? Question 3Answer a. $9100 b. $7100 c. $4900 d. $2900
A two-year project has sales of $582,960, cash costs of $411,015, and depreciation expense of $68,109. The tax rate is 24 percent and the discount rate is 12 percent. What is the amount of the annual depreciation tax shield? O $23,606.67 O $16,346.16 O $47,213.34 O $26,210.01 A Moving to another question will save this response. Question 12 of 30
5. A project costs 20,00,000 and yields annually a profit of Rs. 3,00,000 after depreciation @ 12½% but before tax at 50%. Calculate the pay-back period
3. An investment of $500,000 generates an annual income of$150,000 over the next4 years with a salvage value of$200,000. At MARR-10% is this a good investment (by computing P.W. factor)?, The effective tax rate is 40% and MACRS depreciation with depreciation life of 3 years is employed. The present worth of this investment is: