Last year, a firm declared after-tax salvage on machinery of $40101. The machinery's sale price was...

Last year, a firm declared after-tax salvage on machinery of $40101. The machinery's sale price was $35537 and its book value was $49003. What tax rate was used for this salvage?

Solutions

Expert Solution

Book value	$ 49,003.00
Selling price	$(35,537.00)
Loss on sale of assest	$ 13,466.00

After tax salvage value	$ 40,101.00
Selling price	$(35,537.00)
Tax effect	$ 4,564.00

Tax rate	4564/13466
Tax rate	33.89%

ekkarill92 answered 2 years ago

Next > < Previous

Related Solutions

A pump in a production plant costs $15,000. After 9 years, the salvage value is declared...

A pump in a production plant costs $15,000. After 9 years, the salvage value is declared at $0. Determine the depreciation charge and book value for Year 9 using Straight Line, SOYD, and 7-years MACRS depreciation. Then, find the PW of each depreciation schedule if the interest rate is 15%.

Which of the following is a correct calculation for after-tax salvage value if salvage value and...

Which of the following is a correct calculation for after-tax salvage value if salvage value and book value differ? A) Salvage – T(book value – salvage) B) (Initial cost - Salvage)T – (book value – salvage) C) Salvage – T(salvage – (initial cost – accumulated depreciation)) D) (Salvage – accumulated depreciation)T – (salvage – book value)

AFTER TAX SALVAGE VALUE Karsted Air Services is now in the final year of a project....

AFTER TAX SALVAGE VALUE Karsted Air Services is now in the final year of a project. The equipment originally cost $26 million, of which 90% has been depreciated. Karsted can sell the used equipment today for $6.5 million, and its tax rate is 35%. What is the equipment's after-tax salvage value? Round your answer to the nearest dollar. Write out your answer completely. For example, 13 million should be entered as 13,000,000.

After tax salvage value Kennedy Air Services is now in the final year of a project....

After tax salvage value Kennedy Air Services is now in the final year of a project. The equipment originally cost $25 million, of which 85% has been depreciated. Kennedy can sell the used equipment today for $6.25 million, and its tax rate is 35%. What is the equipment's after-tax salvage value? Round your answer to the nearest cent. Write out your answer completely. For example, 13 million should be entered as 13,000,000.

AFTER TAX SALVAGE VALUE Karsted Air Services is now in the final year of a project....

AFTER TAX SALVAGE VALUE Karsted Air Services is now in the final year of a project. The equipment originally cost $23 million, of which 80% has been depreciated. Karsted can sell the used equipment today for $5.75 million, and its tax rate is 40%. What is the equipment's after-tax salvage value? Round your answer to the nearest dollar. Write out your answer completely. For example, 13 million should be entered as 13,000,000. $ ________ 4. REPLACEMENT ANALYSIS The Oviedo Company...

AFTER TAX SALVAGE VALUE Karsted Air Services is now in the final year of a project....

AFTER TAX SALVAGE VALUE Karsted Air Services is now in the final year of a project. The equipment originally cost $27 million, of which 80% has been depreciated. Karsted can sell the used equipment today for $6.75 million, and its tax rate is 40%. What is the equipment's after-tax salvage value? Round your answer to the nearest dollar. Write out your answer completely. For example, 13 million should be entered as 13,000,000.

A firm has after rate income tax last year of $3.0. It’s depreciation expenses were 0.2...

A firm has after rate income tax last year of $3.0. It’s depreciation expenses were 0.2 million, and its total cash flow was $3.0 million. What happened to the net working capital during the year.

how do I calculate this after tax cash flow from salvage? tax is 35% salvage value...

how do I calculate this after tax cash flow from salvage? tax is 35% salvage value is $4,800,000

our firm (an Australian firm) makes a sale to a Japanese customer. The sale price is...

our firm (an Australian firm) makes a sale to a Japanese customer. The sale price is 200 million Japanese Yen payable in exactly three months from today. The current exchange rate is AUD/JPY = 90 (i.e., 1 Australian Dollar (AUD) is worth 90 Japanese Yen (JPY)). The current interest rates in Australia and Japan are 3% p.a. and 0.5% p.a., respectively. Given this information, please answer the following questions. Please label your answers according to parts. (a) Given that Australian...

Gemco Jewelers earned $5 million in after tax operating income last year (EBIT*(1-T)). The firm had...

Gemco Jewelers earned $5 million in after tax operating income last year (EBIT*(1-T)). The firm had capital expenditures of $4 million and depreciation of $2 million during the year, and no NWC. Gemco has a pretax cost of debt of 3%, and a tax rate of 20%. The company has an unlevered beta of 1. The risk-free interest rate is 1.5% and the market risk premium is 4%. 1.Find Gemco’s Free Cash Flow (FCF) 2.Assume the FCF found is perpetual....

Subjects