fix and give correct answers please. i will upvote! Problem 21-6 MACRS Depreciation and LeasingYou work for a nuclear research laboratory that is contemplating leasing a diagnosticscanner (leasing is a common practice with expensive, high-tech equipment). Thescanner costs $8,200,000, Because of radiation contamination, it will actually becompletely valueless in four years. You can lease it for $2,320,000 per year for fouryears. Assume that the tax rate is 24 percent. You can borrow at 6 percent before taxes.Assume that the scanner will be depreciated as three-year property under the MACRSdepreciation. What is the NAL of the lease? (A negative answer should be indicated bya minus sign. Do not round intermediate calculations and round your answer to 2decimal places, e.g., 32.16.)NAL$ 14,005,274.17

Discounting rate = Pretax cost of debt*(1-tax rate) = 6%*(1-24%) =4.56% 2]BUYING: Loan…

Answered: Problem 21-6 MACRS Depreciation and…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 8PROB

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Problem 21-6 MACRS Depreciation and Leasing You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner costs $8,200,000, Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $2,320,000 per year for four years. Assume that the tax rate is 24 percent. You can borrow at 6 percent before taxes. Assume that the scanner will be depreciated as three-year property under the MACRS depreciation. What is the NAL of the lease? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NAL
Problem 3 A piping contractor is considering the purchase of a number of pipe laying machines for a project that will last for 6 years. Each machine will cost $ 50,000.00 and have no salvage value at the end of the project. In determining whether to make this purchase, straight line deprecation can be used and an annual income tax on profits of of 34%, and an after-tax MARR is 8%. What is the minimum annual net benefit before taxes that must be generated by the each machine in order to justify its purchase? Answer:
Item 9 You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner costs $8,300,000, Because of radiation contamination, it will actually be completely valueless in four years. You can lease it for $2,385,000 per year for four years. Assume that the tax rate is 25 percent. You can borrow at 7 percent before taxes. Assume that the scanner will be depreciated as three-year property under the MACRS depreciation. What is the NAL of the lease? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
3 Your firm needs a computerized machine tool lathe which costs $59,000 and requires $12,900 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category, and neither bonus depreciation nor Section 179 expensing can be used. Assume a tax rate of 21 percent and a discount rate of 12 percent. If the lathe can be sold for $5,900 at the end of year 3, what is the after-tax salvage value? (Round your answer to 2 decimal places.) Salvage value after tax $ 5,380.45X 4
Problem 21-1 Lease or Buy You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner costs $6,000,000 and would be depreciated straight-line to zero over six years. Because of radiation contamination, it will actually be completely valueless in six years. You can lease it for $1,200,000 per year for six years. Assume that the tax rate is 21 percent. You can borrow at 6 percent before taxes. What is the NAL? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NAL Should you lease or buy? Buy Lease
Question 5 The Beautyqueen Company is trying to decide whether to lease or buy a new computer assisted drilling system for its oil exploration business. Management has decided that it must use the system to stay competitive; it will provide $10,000 in annual pretax cost savings. The system costs $680,000 and will be depreciated straight-line to zero over five years. Beautyqueen's tax rate is 23 percent, and the firm can borrow at 9 percent. Lambert Leasing Company has offered to lease the drilling equipment to Beautyqueen for payments of $43,000 per year. Lambert's policy is to require its lessees to make payments at the end of the year. a. What is the NAL for Beautyqueen? b. What is the reservation Payment of Lessor?
Problem 21-4 Taxes and Leasing Cash Flows You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner costs $6,300,000 and would be depreciated straight-line to zero over six years. Because of radiation contamination, it will actually be completely valueless in six years. You can lease it for $1,260,000 per year for six years. Assume that your company does not contemplate paying taxes for the next several years. You can borrow at 6 percent before taxes. What is the NAL of the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NAL
QUESTION 7 Massey Enterprises is planning to buy a new machine to decrease the overall cost of production. This machine will cost $50000 and will help to save the company $22000 in operating costs annually. The machine will be fully depreciated using a straight-line depreciation method to a useful life of 4 years. The actual market value of the machine is expected to be zero at the termination of the project. The marginal tax rate for the company is 21 and the discount rate for this project is 11 percent. What is the net present value of this 4-year project?
Project Section 1: You are considering buying an industrial equipment whose price is 445000. The equipment is expected to earn an annual revenue of $150,000. The equipment will be depreciated under MACRS as a five-year recovery property. The equipment will be used for seven years, at the end of which time, you can sell it for $50,000. Your company's marginal tax rate is 35% over the project period. Perform the following: a) Determine the net after-tax cash flows for each period over the project life. b) Net present worth assuming company MARR 15% . c) Annual equivalent cash flow company MARR 15%. = =
#17 Daily Enterprises is purchasing a $10.51 million machine. It will cost $50,155.00 to transport and install the machine. The machine has a depreciable life of five years using the straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.48 million per year along with incremental costs of $1.46 million per year. Daily's marginal tax rate is 34.00%. The cost of capital for the firm is 15.00%. (answer in dollars..so convert millions to dollars) What is the year 0 cash flow for the project? Submit Answer format: Currency: Round to: 2 decimal places.
Question 9 Daily Enterprises is purchasing a $9.6 million machine. It will cost $52,000 to transport and install the machine. The machine has a depreciable life of five years using straight-line depreciation and will have no salvage value. The machine will generate incremental revenues of $4.1 million per year along with incremental costs of $1.1 million per year. Daily's marginal tax rate is 21%. You are forecasting incremental free cash flows for Daily Enterprises. What are the incremental free cash flows associated with the new machine? The free cash flow for year 0 will be $nothing. (Round to the nearest dollar.) The free cash flow for years 1–5 will be $_______________________ (Round to the nearest dollar.)
i will 10 upvotes urgent Your firm needs a computerized machine tool lathe which costs $56,000 and requires $12,600 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 35 percent and a discount rate of 12 percent. Calculate the depreciation tax shield for this project in year 3.

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