Question
In: Accounting
A firm purchased some office equipment for a total cost of $300000. The equipment generated net...
A firm purchased some office equipment for a total cost of $300000. The equipment generated net income of $100000 per year. The firm’s marginal tax rate is 20%. The equipment was sold at the end of the 4th year for a total of $75000. Assume that MARR is 12%/year. Calculate the net present worth (NPW) of this investment for problems a-d.
a.) If the firm used the straight line depreciation, NPW =
b.) If the firm used the SOYD depreciation, NPW =
c.) If the firm used the DDB depreciation, NPW =
d.) If the firm used the MACRS depreciation, NPW =
Solutions
ekkarill92 answered 1 year agoRelated Solutions
A firm purchased some office equipment for a total cost of $300000. The equipment generated net...
A firm purchased some office equipment for a total cost of
$300000. The equipment generated net income of $100000 per year.
The firm’s marginal tax rate is 20%. The equipment was sold at the
end of the 4th year for a total of $75000. Assume that MARR is
12%/year. Calculate the net present worth (NPW) of this investment
for problems 5-8.
7 (15 points). If the firm used the DDB depreciation, NPW =
8 (15 points). If the firm used...
A firm purchased some office equipment for a total cost of $300000. The equipment generated net...
A firm purchased some office equipment for a total cost of
$300000. The equipment generated net income of $100000 per year.
The firm’s marginal tax rate is 20%. The equipment was sold at the
end of the 4th year for a total of $75000. Assume that MARR is
12%/year. Calculate the net present worth (NPW)
8. If the firm used the MACRS depreciation, NPW =
A firm purchased some office equipment for a total cost of $300000. The equipment generated net...
A firm purchased some office equipment for a total cost of
$300000. The equipment generated net income of $100000 per year.
The firm’s marginal tax rate is 20%. The equipment was sold at the
end of the 4th year for a total of $75000. Assume that MARR is
12%/year. Calculate the net present worth (NPW) of this investment.
If the firm used the MACRS depreciation, NPW =
A firm purchased some office equipment for a total cost of $300000. The equipment generated net...
A firm purchased some office equipment for a total cost of
$300000. The equipment generated net income of $100000 per year.
The firm’s marginal tax rate is 20%. The equipment was sold at the
end of the 4th year for a total of $75000. Assume that MARR is
12%/year. Calculate the net present worth (NPW) of this investment.
If the firm used the DDB depreciation, NPW =
A firm purchased some office equipment for a total cost of $300000. The equipment generated net...
A firm purchased some office equipment for a total cost of
$300000. The equipment generated net income of $100000 per year.
The firm’s marginal tax rate is 20%. The equipment was sold at the
end of the 4th year for a total of $75000. Assume that MARR is
12%/year. Calculate the net present worth (NPW) of this investment
for problems 5-8.
7. If the firm used the DDB depreciation, NPW = ?
8. If the firm used the MACRS depreciation,...
On January 2, 2016, the Hanover Company purchased some office equipment for $23,000. The equipment is...
On January 2, 2016, the Hanover Company purchased some office
equipment for $23,000. The equipment is expected to have a useful
life of five years and a salvage value of $5,000. Prepare a
schedule showing the annual depreciation for each of the first
three years of the asset's life under the straight-line method, the
double-declining-balance method, and the sum-of-the-years'-digits
method
On January 2, 2019, the Hanover Company purchased some office equipment for $24,000. The equipment is...
On January 2, 2019, the Hanover Company purchased some office
equipment for $24,000. The equipment is expected to have a useful
life of five years and a salvage value of $3,000. Prepare a
schedule showing the annual depreciation for each of the first
three years of the asset's life under the straight-line method, the
double-declining-balance method, and the sum-of-the-years'-digits
method
A firm purchased some equipment at a price of $150,000. The equipment resulted in an annual...
A firm purchased some equipment at a price of $150,000. The
equipment resulted in an annual net savings of $6,000 per year
during the 10 years it was used. At the end of 10 years, the
equipment was sold for $110,000. Draw a cash-flow diagram that
depicts the situation. Assuming an annual effective interest rate
of 6.5%, what was the equivalent cost to the company of this
transaction on the purchase date?
The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of...
The Collins Corporation purchased office equipment at the
beginning of 2019 and capitalized a cost of $2,200,000. This cost
included the following expenditures:
Purchase price
$
1,960,000
Freight charges
42,000
Installation charges
32,000
Annual maintenance charge
166,000
Total
$
2,200,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2019 and
2020.
In 2021, after the 2020 financial statements were issued, the
company decided...
The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of...
The Collins Corporation purchased office equipment at the
beginning of 2019 and capitalized a cost of $2,308,000. This cost
included the following expenditures:
Purchase price
$
2,020,000
Freight charges
48,000
Installation charges
38,000
Annual maintenance charge
202,000
Total
$
2,308,000
The company estimated an eight-year useful life for the equipment.
No residual value is anticipated. The double-declining-balance
method was used to determine depreciation expense for 2019 and
2020.
In 2021, after the 2020 financial statements were issued, the
company decided...
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