What would depreciation expense be each year under method

Assignment Help Financial Accounting
Reference no: EM132834166

Wendy's boss wants to use straight-line depreciation for the new expansion project because he said it will give higher net income in earlier years and give him a larger bonus. The project will last 4 years and requires $1,610,000 of equipment. The company could use either straight-line or the 3-year MACRS accelerated method. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life. (Ignore the half-year convention for the straight-line method.) The applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%. The project cost of capital is 8%, and its tax rate is 45%.

Problem a. What would the depreciation expense be each year under each method? Enter your answers as positive values. Do not round intermediate calculations. Round your answers to the nearest dollar.

Reference no: EM132834166

Questions Cloud

What will be the expected return and beta of portfolio : AT&E has an expected return of 20 percent with a beta of 2.0. What will be the expected return and beta of your portfolio after you purchase the new stock?
Compute mse using the average of last two values : a. Compute MSE using the average of last two values as the forecast for the next period. What is the forecast for month 8?
How much will save each period with the option : A company can borrow $740000 for 5 years by issuing bonds, Which option is better and how much will you save each period with this option?
What is the planning horizon : What is the level of planning for each in the planning hierarchy? What is the planning horizon for each and how is it determined?
What would depreciation expense be each year under method : What would the depreciation expense be each year under each method? Enter your answers as positive values. Do not round intermediate calculations.
Draw a diagram depicting the firm profit-maximizing price : Suppose that a certain manufacturer has a monopoly on the sorority and fraternity ring business (a constant-cost industry) because it has persuaded
Create a mentoring plan for the beginning teachers : In 825-words, create a mentoring plan for the beginning teachers to be mentored by your school's more experienced and proficient teachers.
What are the goals of the organization : Research the organizational structure of the United Nations Human Rights Council. What are the goals of the organization?
Should chen buy the new machine : Should Chen buy the new machine? Although the Chen Company's milling machine is old, it is still in relatively good working order

Reviews

Write a Review

Financial Accounting Questions & Answers

  Why would the price-earnings ratio be higher for software

Why would the price-earnings ratio be higher for the software company? Why would the bank have dividend yield and the software company would not?

  Prepare entry for the year-end fair value adjustment

On October 1, 4M Ltd. purchased a 7% bond with a face value of $1,000 for trading purposes, Prepare 4M's entry for the year-end fair value adjustment.

  What will happen to present value of interest tax savings

What will happen to the present value of interest tax savings, if interest rates drop tomorrow to 7% but the debt itself is fixed rate debt

  Why should whitepearl berhad focus on project free cash flow

Why should WhitePearl Berhad focus on project free cash flows as opposed to the accounting profits earned by the project when analyzing

  The journal entry to record the accrual of these wages

In July, Essinger Inc. incurred $72,000 of direct labor costs and $3,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

  Prepare a journal entry to accrue the weeks salaries expense

A company has 90 employees and a weekly payroll of $117,000. Prepare a journal entry to accrue this weeks salaries expense and withholdings.

  What is the operating cash flow for nel place

Nel's Place has total sales of $1,456, The tax rate is 34 percent. The firm does not have any interest expense. What is the operating cash flow?

  Calculate the terminal value

Calculate the terminal value of the 401(k) plan for Option 3, assuming all returns and contributions remain constant over the 15 years

  How would figure out the amount of gross sales

How would you figure out the amount of gross sales. Assume the gross method for accounting for cash discounts. Round to the nearest thousand.

  Compute what is the yield to call

If the call price is $1,150 and the bond can be called in 8 years, Determine what is the yield to call? Assume semi-annual compounding.

  Financial statements

these financial statements items are for chen comapny

  Evaluation of unit costs for materials

Evaluation of unit costs for materials and conversion costs based on equivalent units of production given production costs at beginning, for processing and at ending work-in-process stages

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