How to use straight-line depreciation to pay tax

Reference no: EM13186433

Valles Global Industries (VGI) is considering selling a product to SohnCo. The contract sells parts for revenue of $32 million a year for 15 years. Their initial investment is $150 million and the equipment has no salvage at 15 years. They estimate production costs at $7,530,000 per year. They use straight-line depreciation and pay tax at 48%. If VGI's After-Tax MARR is 10%, should they do this project? Why?

Reference no: EM13186433

Questions Cloud

Explain helium tank is pressurized : A 11.0-L helium tank is pressurized to 26.0 atm. When connected to this tank, a balloon will inflate because the pressure inside the tank is greater than the atmospheric pressure pushing on the outside of the balloon.

Research paper on the turing and von neumann models : Write a two page research paper on the Turing and von Neumann models.

What is a 50 percent confidence interval for the actual mean : The number of staff personnel needed to handle patients at a medical center is determined by the mean time that patients must wait before being attended to by a physician. For a random sample of 100 previously recorded emergencies, the sample mean..

Make a mo energy-level diagram for no : prepare a MO energy-level diagram for NO, showing clearly how the atomic orbitals interact to form MOs.

How to use straight-line depreciation to pay tax : Valles Global Industries (VGI) is considering selling a product to SohnCo. The contract sells parts for revenue of $32 million a year for 15 years. Their initial investment is $150 million and the equipment has no salvage at 15 years. They esti..

Explain what is the molar mass of the protein : what is the molar mass of the protein? A solution of 7.50 mg of a small protein in 5.00 ml of aqueous solution has an osmotic pressure of 6.80 torr at 23.1 degrees celcius.

Find the sum of the perimeters and the sum of the areas : find the sum of the perimeters and the sum of the areas of all the squares, including the initial one.

State the top stream contains diesel and heating oil : The top stream contains diesel and heating oil. The middle stream contains heating oil and lubricating oil, and the bottom stream contains the solids

Find the average resistance of the wood : A bullet of mass 0.04 kg travelling at 300 m/s hits a fixed wooden block and penetrates a distance of 4cm. Find the average resistance of the wood.

User Account

All Pages