User Account

All Pages

How will the tax authority decision affect after-tax cost

Assignment Help Accounting Basics
Reference no: EM133114053

Question - Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $450,000. Of this sum, $55,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the company will need to treat this cost as a tax-deductible current expense or as a capital investment. In the latter case, the company could depreciate the $55,000 straight-line over five years. How will the tax authority's decision affect the after-tax cost of the kiln? The tax rate is 25%, and the opportunity cost of capital is 5%.

Reference no: EM133114053

Questions Cloud

How much materials cost was assigned to units transferred : How much materials cost was assigned to the units transferred out of the Weather Proofing Department during April
A budget cash flow statement for the three months : A budget cash flow statement for the three months of January, February and March 20X4 and a budget statement of profit or loss for the three months ending
Prepare the cash flows from operating activities section : Staley Inc. reported the following data: Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method
Prepare modupes statement of cash flows : Prepare Modupe's statement of cash flows for the year ended 31 May 20X4 and Advise her on any actions she could take to improve the cash position
How will the tax authority decision affect after-tax cost : How will the tax authority's decision affect the after-tax cost of the kiln? The tax rate is 25%, and the opportunity cost of capital is 5%
Calculate his gross and net profit margins : Calculate his gross and net profit margins and Write a brief report - Wazir would like you to explain to him the impact of these events on his business
Prepare the statement of financial position at 30 June 20X3 : Prepare the statement of financial position at 30 June 20X3 and Discuss Hien's cash position. Is there any other information which might be useful to you
What is its net income : Precious Metal Mining has $14 million in sales, its ROE is 18%, and its total assets turnover is 2.5×. What is its net income
What amount of net income or loss did the company earn : During the year, owner invested an additional $90,000 in the business and made withdrawals worth $40,100. What amount of net income or loss did company earn

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd