Calculate the initial depletion rate and the depletion rates

Assignment Help Financial Management

Reference no: EM131851046

In 2009, Mr. Brad bought a timberland property with a purchase price of $160,000. He also paid $2,5000 for timberland cruise, $1,500 for boundary survey, and $1,000 for title search and closing cost. The fair market value for the merchantable timber, premarch timber, and land are $90,000, $30,000, and $25,000, respectively. The initial inventory was 3,800 tons. Harvest will be 6% of the inventory, after which growth will be 7% of the inventory. The premarch timber values (trees <= 13 years) by age classes are given below:

Age Premarch $

13 5,500

12 3,600

11 2,700

10 1,800

Calculate the initial depletion rate and the depletion rates for the next 4 years. If Mr. Brad sold year 2010 harvest at price $34/ton and the capital gain rate is 15%, what's the tax due?

Reference no: EM131851046

Questions Cloud

Calculate net present value and internal rate of return : FIN 4330 Homework. Calculate the Net Present Value (NPV) and Internal Rate of Return (IRR) of both projects, assuming a 4.15% discount rate

What is the clean price of the bond : What is the clean price of the bond?

What does jim believe the inflation rate will be over : An investment offers a 14 percent total return over the coming year. Jim Flaherty thinks the total real return on this investment will be only 9 percent.

What will these bonds sell for at issuance : The required return on the bonds will be 7 percent. What will these bonds sell for at issuance?

Calculate the initial depletion rate and the depletion rates : Calculate the initial depletion rate and the depletion rates for the next 4 years.

Explain in detail the mix of media you would choose to use : Explain in detail the mix of media you would choose to use, identifying and describing the target market you hope to reach using ea medium.

What is the trader net profit or loss : The options are exercised when the stock price is $69. What is the trader's net profit or loss? What is the answer and the rationale for the answer?

Sketch the npv profile for investment : At what discount rate is the NPV just equal to zero? Sketch the NPV profile for this investment based on these three points.

Identify the two different leadership styles of each one : Identify, compare, and contrast the two different leadership styles of each one. Be sure to add applicable leadership theories and concepts.

User Account

All Pages