What is the book value of the machine

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Reference no: EM132037211

1. Troy Industries purchased a new machine 4 year(s) ago for $ 76,000. It is being depreciated under MACRS with a 5-year recovery period using the schedule : 5 years 20% 32% 19% 12% 12% 5% Assume 40 % ordinary and capital gains tax rates. a. What is the book value of the machine? b. Calculate the firm's tax liability if it sold the machine for each of the following amounts:

$ 91,200?; $ 53,200?; $ 12,920?; and $ 9,000.

2. Joel Foster is the portfolio manager of the SF Fund, a $3.55 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 5.00%.

What rate of return should investors expect (and require) on this fund?

Stock Amount Beta A $1,075,000 1.20

B 675,000 0.50

C 1,300,000 1.40

D 500,000 0.75

Total Amount: 3,550,000

a. 11.52% b. 11.58% c. 11.46% d. 11.64% e. 11.70%

Reference no: EM132037211

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