Reference no: EM131331061
In February 2013, Betty bought and placed in service for 100% use in her business machinery (7-year property) that cost $100,000.
She used the half-year convention and MACRS deductions for the truck were $14,290 in 2013 and $24,490 in 2014. She did not take the section 179 deduction.
Betty sold the machinery in May 2015 for $60,000.
The MACRS deduction in 2015, the year of sale, is $8,745 (1/2 of $17,490).
What is Betty's Gain on the sale of the Machine?
Betty's filing status is single, and her taxable income, EXCLUDING this gain, is 92,000 (Tax rate = 28%)
How much tax will Betty pay on the Gain on the sale of the Machine?
Income Tax
|
The debt pays interest at a rate
: Barnes and Noble has debt outstanding of $3,000. The debt pays interest at a rate of 8% and has a yield to maturity of 5%. B&N’s tax rate is 25%. How much does B&N save in taxes this year because of its debt?
|
|
What is the present value of fords interest tax shield
: Ford expects to earn a free cash flow of $100, starting in 1 year, forever. The discount rate on the assets of the firm is 18%. Further, Ford has issued debt of $1,000 at an interest rate and yield-to-maturity of 5%. Ford will perpetually roll this $..
|
|
How much of gain will be taxed at capital gains rates
: On December 1, 2015, Bernadine sold a Machine for $100,000. The Machine had originally cost $140,000 and, over the years, Bernadine had claimed $60,000 in depreciation. How much of the gain will be taxed at ordinary income rates? (section 1245 recapt..
|
|
The change wonot effect the salvage value estimate
: You just finished analyzing a five-year capital investment proposal that has a NPV of $250,000. Suddenly, you get a frantic call from the VP of Operations saying the initial investment in equipment will be $275,000 more than first thought, but the ch..
|
|
What is betty gain on the sale of the machine
: In February 2013, Betty bought and placed in service for 100% use in her business machinery (7-year property) that cost $100,000. She used the half-year convention and MACRS deductions for the truck were $14,290 in 2013 and $24,490 in 2014. She did n..
|
|
What is the reward-to-variability ratio
: If a stock has an expected return of 20% and a standard deviation of 25%. The risk-free rate is 10%. What is the reward-to-variability ratio?
|
|
End of each of next ten years in order to accumulate
: Given an 11% rate of return, the amount that must be put into an investment account at the end of each of the next ten years in order to accumulate $60,000 to pay for a child’s education is closest to:
|
|
Compute the duration and expected price change
: Compute the duration and expected price change for a 1/2% increase in interest rates for the following bond: The par value of the bond is $1,000. The bond has 4 years to maturity with a 7 percent annual coupon rate. The yield to maturity is 8.53%.
|
|
Complete portfolio contains a risky asset
: Suppose you invest $1K (where 1K=1,000) in a complete portfolio. The complete portfolio contains a risky asset with an expected return of 16% and a standard deviation of 20% and a risk free Treasury bill with a return of 6%. A portfolio that has an e..
|