Sale or exchange bently corporation

Assignment Help Accounting Basics

Reference no: EM131071037

Sale or Exchange Bently Corporation can sell a warehouse for $800,000 that has a basis of $300,000. It has two replacement alternatives. It can purchase a replacement warehouse for $800,000 or it can make a direct exchange for another suitable warehouse. This property has a fair market value of only $725,000, but the owner will not pay anything additional for Bently's warehouse. Assume Bently uses a 40 percent combined federal and state marginal tax rate and an 8percent discount rate for all asset decisions. Assume either property would be depreciated evenly over 40 years. Should Bently sell the building at its fair market value and purchase the$800,000 property or should it make the exchange?

Reference no: EM131071037

Questions Cloud

Modern trend in human management : Modern trend in Human Management- An Active look at the Challenges Faced by Expatriates In Nigeria and Identify an example of a management research article, such as one from your critical literature review, and evaluate the data collection methods..

Relationship between an organization ability : Explain the relationship between an organization's ability to effectively use information technology and its ability to meet its corporate strategic goals.

List the four actors in our model economy : (1) List the four actors in our model economy. (2) List the variables that enter the household's budget constraint. (3) List the variables that enter the national accounting identity. (4) Describe the firm's decision process.

Calculate the average cash flow from the mine : A silver mine can yield 16,000 ounces of silver at a variable cost of $34 per ounce. The fixed costs of operating the mine are $56,000 per year. In half the years, silver can be sold for $50 per ounce; in the other years, silver can be sold for only ..

Sale or exchange bently corporation : Sale or Exchange Bently Corporation can sell a warehouse for $800,000 that has a basis of $300,000. It has two replacement alternatives. It can purchase a replacement warehouse for $800,000 or it can make a direct exchange for another suitable war..

Websites on cloud computing : The goal of taking advantage of cloud computing is to have your computing costs align with the activity level of your organization. The future of Cloud computing brings new ways to collaborate everywhere through mobile devices. Surf the Internet ..

What is the overall significance of the regression : What is the overall significance of the regression?

Why is operating leverage different at two levels of sales : Modern Artifacts can produce keepsakes that will be sold for $40 each. No depreciation fixed costs are $600 per year, and variable costs are $20 per unit. What is the degree of operating leverage of Modern Artifacts when sales are $1,800? What is the..

Joining senior management : Proper training is one of the main tools in maintaining a successful OHS program. With out training, all the industry's policies & procedures are just words in writing. Unfortunately, not everyone seems the same way. Basic safety training is often..

User Account

All Pages