PLEASE BE DETAILED AND SHOW THE CALCULATIONS OF THE ANSWERS A company is determined to purchase...

PLEASE BE DETAILED AND SHOW THE CALCULATIONS OF THE ANSWERS

A company is determined to purchase a special tool at a cost of $ 9,000. This team will generate savings amounting to $ 3,000 the first year, with an increase of $ 500 per year until the end of the fifth year. The company uses the MACRS depreciation method. Consider a 21% tax rate.

Complete the following table to determine the after-tax cash flow

Years	Cash flow before taxes	Depreciation rates	MACRS depreciation	Taxable income	Tax amount	Cash flow after tax
0
1
2
3
4
5

b) Consider that the tool was sold for $ 2,500 at the end of the fifth year. Recalculate flow cash after-tax taking into account the sale of the asset. (Only fifth year)

c) If the equipment sold for $ 30,000 in the third year, determine the loss or recapture of corresponding depreciation.

Expert Solution

jeff jeffy answered 1 year ago

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