OjO is analyzing the Project of manufacturing golden flakes the loop to manufacturer cost hundred thousand dollars I will be depreciated over five years to zero value I expect to sell the loops after the 32 years of depreciation remaining for 10,000 due to expect an advance a long technology if I go pays 40% tax rate, what isThe after tax cash of the loo sale?
Added by Matthew N.
Step 1
- The total cost of the loop is $100,000. - It will be depreciated over 5 years to a zero value. - Annual depreciation expense = Total cost / Useful life = $100,000 / 5 = $20,000. Show more…
Show all steps
Your feedback will help us improve your experience
Akash M and 63 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
An eight-year project requires $18 million in initial investment, depreciated on a straight-line basis over its 12-year useful life. It has a required rate of return of 12% per year. The project will produce a consumer good that can be sold for $24/unit, with a $14/unit variable cost, and $8,000,000 fixed costs. At the end of year eight, the fixed assets of the project can be liquidated for $8,000,000. The applicable tax rate is 25%. Calculate the NPV break-even annual dollar cash flows for this project.
Akash M.
We are evaluating a project that costs $786,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 65,000 units per year. Price per unit is $48, variable cost per unit is $25, and fixed costs are $725,000 per year. The tax rate is 22 percent, and we require a return of 10 percent on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent.
Mauya M.
Gateway Communications is considering a project with an initial fixed asset cost of $2,872,000, which will be depreciated straight-line to a zero book value over the 10-year life of the project. At the end of the project, the equipment will be sold for an estimated $300,000. The project will not directly produce any sales but will reduce operating costs by $714,000 a year. The tax rate is 21 percent. The project will require $52,000 of inventory, which will be recouped when the project ends. What is the net present value at the required rate of return of 16 percent?
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD