Will obtain the desired after-tax rate of return

Reference no: EM132168108

Question: Zeon, a large, profitable corporation, is considering adding some automatic equipment to its production facilities. An investment of $120,000 will produce an initial annual benefit of $29,000, but the benefits are expected to decline $3000 per year, making secondyear benefits $26,000, third-year benefits $23,000, and so forth. If the firm uses sum-of-years'-digits depreciation, an 8-year useful life, and $12,000 salvage value, will it obtain the desired 6% after-tax rate of return? Assume that the equipment can be sold for its $12,000 salvage value at the end of the 8 years. Also assume a 46% income tax rate for state and federal taxes combined.

Reference no: EM132168108

Questions Cloud

Compute steve after-tax rate of return : The Lynch Bull investment company suggests that Steven Comstock, a wealthy New York City investor (his incremental income tax rate is 35%).

Discuss the exceptions to the exclusionary rule : Discuss the difference in a stop and frisk and an arrest. What are the requirements for an officer to conduct a "stop and frisk"?

Identify and discuss at least three prima facie duties : Illustrate two to three (2-3) ways in which you would address self-interest and pursuit of pleasure to prevent police corruption.

What after-tax rate of return can he expect to receive : In this analysis Al estimates that the income and expenses will remain constant at their present levels. If he buys and holds the property for 20 years.

Will obtain the desired after-tax rate of return : Zeon, a large, profitable corporation, is considering adding some automatic equipment to its production facilities. An investment of $120,000 will produce.

Average delay in the onset of dementia : Being bilingual appears to slow the onset of dementia by an average of 4.5 years with a standard deviation of 2 years. In a random sample of 75 bilingual people

Explain the benefits for patients nearing end-of-life : IFSM 304:Explain the benefits for patients nearing end-of-life that came from the right-to-die movement.

What is the probability a simple random sample : What is the probability a simple random sample (SRS) of 25 cats will kill an average of between 9 and 12 birds a year?

What aftertax rate of return would the corporation receive : A group of businessmen formed a corporation to lease for 5 years a piece of land at the intersection of two busy streets. The corporation has invested $50,000.

User Account

All Pages