What is the taxable income at the end of year

Assignment Help Econometrics

Reference no: EM13223969

An injection-molding machine can be purchased and installed for $90,000. It is in the seven-year GDS property class and is expected to be kept in service for eight years. It is believed that $10,000 can be obtained when the machine is disposed of at the end of year eight. The annual value added that can be attributed to this machine is constant over eight years and amounts to $15,000. The company uses an effective income tax rate of 40%, and the after-tax MARR of 15% per year.

a) What is the approximated value of the company's before-tax MARR?

b) Determine the GDS depreciation amounts in years on through eight.

c) What is the taxable income at the end of year eight that is related to capital investment?

d) Set up a table and calculate the ATCF for this machine

e) Should a recommendation be made to purchase the machine?

Reference no: EM13223969

Questions Cloud

Determine the recovery period for the furniture : Your company just purchased office furniture (Asset class 00.11) for $100,000 and placed it in service an August 13, 2007. The cost basis for the furniture is $100,000, and it will be depreciated with the GDS using half-year convention.

Discuss a firms objective relative to its economic cost : Discuss a firm's objective relative to its economic cost. Describe each of the firm's economic cost, and whether these would be considered explicit or implicit. What is the difference between an economic profit and an accounting profit.

What in the material on addiction : What in the material on addiction did you find most useful? What are the three most valuable things you found that you would share with a friend who struggle with such issues?

Explain what is the value of the ionization constant : what is the value of the ionization constant of the weak acid HX at 298 K? You may ignore the contribution of the self-ionization of water.

What is the taxable income at the end of year : An injection-molding machine can be purchased and installed for $90,000. It is in the seven-year GDS property class and is expected to be kept in service for eight years. It is believed that $10,000 can be obtained when the machine is disposed of at ..

What are the largest issues facing business government : What are the three largest issues facing the business government society relationship? Explain why you chose those three.

Calculate the final ph of the solution : 0.1 Mol L-1 of HC2H3O2 and 0.05 mol L-1 of Hno2 are added to the same container of water at 298 K. compute the final pH of this solution.

What is the average and the standard deviation of demand : What is the average and the standard deviation of demand during the protection interval?

User Account

All Pages