An asset with initial cost base of 6 million was bought 5 years ago. At the end of the current year (fifth year) the asset is sold by 1.1 million. The asset belongs to the 7 years MACRS property class. Knowing that the gains(loss) tax rate is 40%, what is the net proceeds resulted from selling this asset? $897,400 2,044,012 978,700 O2,371,600
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- A manufacturing company purchased 10 years a milling machine for ₽60,000. A straight-linedepreciation reserve had been provided on the 20-year life of the machine. The owner of themachine shop desires to replace the old milling machine with a modern unit of manyadvantages costing ₽100,000. It can sell the old unit for ₽20,000. How much new capital will berequired for the purchase?K ces Jane quit her job at Telus where she earned $36,000 a year. She cashed in $40,000 in corporate bonds that earned 10% interest annually to buy a mini-bus. Jane has decided to buy the mini-bus and set up a commuter service between Maple Ridge and Vancouver. There are 300 people who will pay $800 a year each for the commuter service; $650 from each person goes for gas, maintenance, insurance, depreciation, etc. (a) What are Jane's total revenues? (b) What are Jane's explicit costs? (c) What is Jane's accounting profit? (d) List two important implicit costs that Jane has not included. (e) What is Jane's pure economic profit (loss)? What actions should Jane take based on her pure economic profit (loss)?2. A manufacturing company purchased an equipment for methods improvement for P 53,000. Paid P 1,500 for freight and delivery charges to the job site. What is the yearly depreciation cost using the sinking fund method at 6% interest. The machine has P 5,000 trade in cost and 10 yrs life.
- In order to claim tax deductions or credits what is required? O documentation in the form of receipts O Form 1098 D & C O Simply stating it on your 1040 O Indicating it prior to your taxes on your W-4 1 2 4 EReviewAn elevator system for a 15-yr old high-rise office building cost P 18M when first installed. The system was designed to last 30 years, with salvage value 10% of the initial cost. What is the depreciation at the end of 15 years? Use sinking fund method, assume interest at 9% compounded annually.Lamar Company is studying a project that would have an eight-vear life and require a S1,600,000 invest- ment in equipment. At the end of eight vears, the project would terminate and the equipment would have no salvage value. The project would provide net income ench year as follows: Sales... Less: Variable expenses. $3,000,000 1.800,000 .... Contribution margin. Less: Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs.... . 1,200,000 $700,000 Amortization 200,000 Total fixed expenses. 900,000 Net income... $ 300,000 The company's discount rate is 18%. Required: 1. Compute the net annual cash inflow from the project. 2. Compute the project's net present value. Is the project acceptable? 3. Compute the project's payback period. If the company requires a maximum payback of the the project acceptable? 4. Compute the project's simple rate of return.
- company is planned to install new automated plastic molding press. Four different presses are available as follows: Press 1 Press 2 Press 3 Press 4 Capital Investment $24,000 $30,000 $49,000 $52,000 Useful Life (year) 5 5 5 5 Annual Expenses Power ($) Labor ($) Maintenance ($) Tax & Insurance ($) 2,720 26,400 1,600 480 2,720 24,000 1,800 608 4,800 16,800 2,600 992 4,800 14,800 2,000 1,040 Assume that each press has the same output capacity (120,000 units per year) and all units can be sold (the selling price is $0.375 per unit. Additional capital invested is expected to earn at least 10%. a) Sketch Cash Flow Diagram for the four choices b) Which press should be chosen (use Present Worth PW method?3. Make an economic analysis to determine which of the following two machines capable of performing the same task in a given amount of time, should be purchased. The minimum return is 8%. Machine A Machine B First Cost P10,000 6 years P20,000 14 years Estimated Life Salvage Value Annual maintenance P6,000 P300 P250 Basing on annual cost, using straight line method of computing depreciation, determine which machine you would choose and how much is the difference in its annual cost? Hint: Compute the Annual Cost of Machine A and Machine B then compare the costs, get the difference and recommend.1-5 Calculate financial net income AFIT and net cash flow AFIT for year 3 only. Your Time 0 investment for a pumping unit is $50,000. An- nual gross revenues are $40,000. Direct costs are $5,000 per year. Depreciation for financial net in- come is calculated assuming a 5 year life, no salvage value, and the straight line method. Cash income taxes are 40% of gross revenue. Assume cash taxes for your financial net income model.
- Schedule Z-lf your filing status is Head of household The tax is: If your taxable income is: of the But not amount Over- over- over- $0 $13,850 10% $0 13,850 52,850 $1,385.00 + 12% 13,850 52,850 84,200 6,065.00 + 22% 52,850 84,200 160,700 12,962.00 + 24% 84,200 160,700 204,100 31,322.00 + 32% 160,700 204,100 510,300 45,210.00 + 35% 204,100 510,300 152,380.00 + 37% 510,300 Write the equation of the 5th row in y=mx+b formOn 3/15/18 Brian donated a painting worth $500,000 to an art museum. If Brian, had sold the painting it would have recognized a long- term capital gain of $100,000. During 2018 Brian. had the following income and expenses: $4,000,000 gross income, $3,000,000 business expenses, $100,000 dividends received deduction, $100,000 net operating loss carryforward, $60,000 net operating loss carryback, and a capital loss carries back of $30,000. Determine Brian's current charitable contribution and charitable contribution deduction in 2018, and charitable contribution carry forward.Consider the revenues and costs in 2019 for Spruce Decor Inc, an Alberta-based furniture company entirely owned by Mr Harold Buford $645,000 a. What would accountants determine Spruce Decor's profits to be in 20197 Spruce Decor's profits in 2019 equal $471000 Furniture Sales Catalogue Sales Labour Costs Materials Costs Advertising Costs Debt-Service Costs $13,500 $350,000 $148,000 $28,000 $30,000