Compute the before-tax rate of return

Assignment Help Business Economics

Reference no: EM131810346

A special power tool for plastic products costs $400,000 has a 4-year useful life, no salvage value, and a 2-year before-tax payback period. Assume uniform annual end-of-year benefits.

a) Compute the before-tax rate of return.

b) Compute the after-tax rate of return, based on MACRS depreciation and a 34% combined corporate income tax rate.

Reference no: EM131810346

Questions Cloud

Journalize the issuance of the preferred stock : Garb Inc. issues 4,700 shares of $110 par value preferred stock for cash at $135 per share. Journalize the issuance of the preferred stock.

Layout of a new research and experimentation facility : An engineer is working on the layout of a new research and experimentation facility.

What would be the total cost both fixed and variable : What would be the total cost, both fixed and variable, at an activity level of 8,600 units? Assume that this level of activity is within the relevant range

Pprepare garrards 2014 income statement : The CFO will use your recommendation to prepare Garrard's 2014 income statement. The following data are for the year ended December 31, 2014.

Compute the before-tax rate of return : a) Compute the before-tax rate of return. b) Compute the after-tax rate of return, based on MACRS depreciation and a 34% combined corporate income tax rate.

Sox has changed the work of independent auditors : SOX has changed the work of independent auditors; auditors have to evaluate internal controls and issue an opinion

Compute the after-tax rate of return for the truck : At the end of 4 years, Ogi sold the truck for $3000. The combined federal and state income tax rate for Ogi is 45%.

Find the chance that cookie contains four chocolate chips : Granma makes a cookie using three cubic inches of her dough. Find the chance that the cookie contains at most four chocolate chips, state your assumptions.

Compute the after-tax cash flow : Compute the after-tax cash flow based on a 34% combined income tax rate. If the corporation's criterion is a 15% after-tax rate of return.

User Account

All Pages