Using the SOYD deprecation method

Assignment Help Financial Management
Reference no: EM13939372

George bought a piece of equivalent for 35,000$. The equipment has a useful life of 10 years and a salvage value of 2,000$ at the end of its useful life. Assume that the annual interest rate is 9%. Calculate the present value of deprecation, using the SOYD deprecation method.

Reference no: EM13939372

Questions Cloud

The conversion value exceeds the call price : Central Food Brokers is considering issuing a 20-year convertible bond that will be priced at its par value of $1,000 per bond. The bonds have a 12 percent annual coupon interest rate, and each bond could be converted into 30 shares of common stock. ..
Share after tax salvage value if the machine is sold : Lion's share inc just bought a 3 million dollar machine that will be depreciated over its 10 year life using straight line depreciation. The marginal tax rate is 40%. What is Lion Share's after tax salvage value if the machine is sold in year 8 for 4..
What is share after tax salvage value : Lion's share Inc. just bought a 2.5 million machine that will be depreciated over its 15 year life using straight line depreciation. The marginal tax rate is 35%. What is Lion's share after tax salvage value if the machine is sold in year 7 for 1.75 ..
What is the operating cash flow for the project in year : You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $430 per unit and sales volume to be 1,000 units in year 1; 1,500 units in year 2; and 1,325 units in ..
Using the SOYD deprecation method : George bought a piece of equivalent for 35,000$. The equipment has a useful life of 10 years and a salvage value of 2,000$ at the end of its useful life. Assume that the annual interest rate is 9%. Calculate the present value of deprecation, using th..
Salvage value of the equipment used in production process : Assume NEWC has an investment opportunity (similar to the air bag opportunity in Other People's Money).The firm can spend a product that will be sold in packets or units of twenty. Assume CF equals net income available to common stockholders plus dep..
Federal-plus-state corporate tax rate : Fredrickson Corp. has $10 million of 5% bonds outstanding. Assume that all of the MM assumption is met, and the firm is subject to a 38% federal-plus-state corporate tax rate. The firm has an EBIT of $1.5 million, and the unlevered cost of equity is ..
Federal-plus-state corporate tax : Companies U and L are identical in every respect except that U is unlevered while L has $10 million of 5.7% bonds outstanding. Assume that (1) all of the MM assumptions are met, (2) both companies are subject to a 31% federal-plus-state corporate tax..
The effective cost of the loan if the note required discount : 4Gifts Galore Inc. borrowed $1.5 million from National City Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A 20% compensating balance requirement raised the effective interest rate. The nominal annual rate on the ..

Reviews

Write a Review

Financial Management Questions & Answers

  Explain differences of pledging and factoring receivables

Explain the differences between pledging and factoring receivables. Explain the difference between a floating lien and a trust receipts arrangement.

  Firms common size income statement

If a firm’s common size income statement shows that the earnings after tax percentage is too low, the firm may have spent too much money:

  Developing a balanced scorecard in unit

Developing a Balanced Scorecard In unit, you are exploring the need for organisations to measure and manage performance against objectives, as well as the potential effectiveness of tools such as Balanced Scorecards and Strategy Maps as aids in ca..

  Calculate the growth rate in dividends

You buy a share of The Ludwig Corporation stock for $22.30. You expect it to pay dividends of $1.01, $1.15, and $1.3094 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $29.62 at the end of 3 years. Calculate the growth rat..

  What is the maximum profit and loss for this position

An investor purchases a stock for $56 and a put option for $.80 with a strike price of $50. The investor also sells a call option for $.80 with a strike price of $66. What is the maximum profit and loss for this position?

  Interest deferred period the loan accumulated interest

Bank of Land lends you money today but requires no payments for 3 years. However, during this interest deferred period the loan accumulated interest at 6% rate, compounded quarterly. The bank amortizes the loan over five year period, requiring quarte..

  What is the monthly payment on mortgage

Please provide the steps to solving this problem using a financial calculator as well as reasonings for certain steps if needed: What is the monthly payment on a $770,000 mortgage? Assume a standard 30-year, 5.5% mortgage with monthly payments.

  Planning to buy house appraised

You are planning to buy a house appraised for $350,000 and finance it through a mortgage of $250,000. You would then have a loan-to-value ratio of 0.714, safely below the cutoff by your lender of 0.80. Being securely employed, your take-home pay is $..

  Related to the length of maturity and coupon rate

Explain the interest rate risk and how it is related to the length of maturity and coupon rate.

  Quantitative problem-what is the value of the bond

Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 7.2%, what is the value of the bond? Round your answer to the nearest cent. D..

  Two production plants-identify benchmarks

El Dorado Company has two production plants. Recently, the company conducted an ABM study to determine the cost of activities involved in processing orders for parts at each of the plants. How might an operations manager use this information to manag..

  Do you agree with managers interpretation of the analysis

Its manager stated that it did not want to pursue a project that had a one-in-three chance of having a negative NPV. Do you agree with the manager's interpretation of the analysis? Explain.

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!

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