Compute the after-tax rate of return on the vessel

Reference no: EM13306864

A small vessel was purchased by a chemical company for $55,000 and is to be depreciated by MACRS depreciation. When its requirements changed suddenly, the chemical company leased the vessel to an oil company for 6 years at $10,000 per year. The lease also provided that the vessel could be purchased at the end of 6 years by the oil company for $35,000. At the end of the 6 years, the oil company exercised its option and bought the vessel. The chemical company has a 34% incremental tax rate. Compute its after-tax rate of return on the vessel.

Reference no: EM13306864

Questions Cloud

Find the maximum kinetic energy of the photoelectrons : The work function for potassium is 2.24 eV. If potassium metal is illuminated with light of wavelength 300 nm

Determine the arrival rate assuming that it is unchanged : Determine the arrival rate assuming that it is unchanged over the duration of the observation period. An approach to a pretimed signal with a 60second cycle has nine vehicles in the queue at the beginning of the effective green.

Find the temperature of the source : A certain light source is found to emit radiation whose peak value has a frequency of 8.28 Ã- 1014 Hz. Find the temperature of the source

What result do you get : You measure the length of a futuristic car to be 3.50m when the car is at rest relative to you. what result do you get

Compute the after-tax rate of return on the vessel : At the end of the 6 years, the oil company exercised its option and bought the vessel. The chemical company has a 34% incremental tax rate. Compute its after-tax rate of return on the vessel.

What forces seem to be acting on the ball : Describe the motion of a ball in a bus when the bus accelerates foward as it might be perceived by a person standing on the ground outside the bus

Find equilibrium flows and travel time before reconstruction : The routes are currently in user equilibrium. A reconstruction project on route 1 reduces capacity to 3.0 kvph, but total travel demand is unaffected. Field studies note a 35.28 sec increase in average travel time

Obtain the gravitational potential energy : A 1.5 kg crate falls from a height of 2.0 m onto a spring scale where the spring constant is 1.5 ´ 105 N/m. when you calculate the gravitational potential energy

Find the values of a and b such that error is minimized : Find the values of A and B such that error is minimized. What power of h is the error proportional to?

User Account

All Pages