Q12) A company has purchased an equipment costing $84,300. The equipment has a useful life of...

Q12) A company has purchased an equipment costing $84,300. The equipment has a useful life of 3 years with a salvage value of $34,100. CCA will be taken using a rate of 30.00%. The tax rate is 29.00%, while the discount rate is 9.00%. Assuming the company takes all available CCA every year and there will be some assets remaining in the CCA class after year 3, what is the EAC of this equipment? 16,741 17,194 17,646 18,099 18,551

Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago

XYZ Company is considering purchasing a piece of equipment costing $400,000. It has a useful life...

XYZ Company is considering purchasing a piece of equipment costing $400,000. It has a useful life of 4years and will be depreciated straight-line to zero, after which it will be scrapped for $30,000. This piece of equipment will save $150,000 per year in pretax operating costs during its useful life but requires an initial investment in NWC of $36,000. XYZ Company has a 21% tax rate and a required rate of return of 12% What is the annual Operating Cash...

A company purchased equipment for $110,000 that is expected to have a useful life of 5...

A company purchased equipment for $110,000 that is expected to have a useful life of 5 years and a salvage value of $10,000. If double declining balance depreciation is used, what is the accumulated depreciation at the end of Year 2? $74,000 $60,000 $70,400

A company purchased equipment for $100,000 that is expected to have a useful life of 10...

A company purchased equipment for $100,000 that is expected to have a useful life of 10 years and no salvage value. The company sold the equipment at the end of the fourth year of its useful life, at which point it had fair market value of $65,000. If the asset was sold for $55,000 and was being depreciated using the straight line method as was reported at book value, what amount of gain or loss would be reported at the...

Moreno Corporation is considering investing in specialized equipment costing $525,000. The equipment has a useful life...

Moreno Corporation is considering investing in specialized equipment costing $525,000. The equipment has a useful life of five years and a residual value of $55,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are Year 1 $245,000 Year 2 $190,000 Year 3 $152,000 Year 4 $112,000 Year 5 $95,000 $794,000 Moreno Corporation's required rate of return is 14%. The net present value of the Moreno Corporation's investment is closest to Select one: a....

Co. is considering purchasing a piece of equipment costing $300,000. It has a useful life of...

Co. is considering purchasing a piece of equipment costing $300,000. It has a useful life of 3 years and will be depreciated straight-line to zero, after which it will be scrapped for $20,000. This piece of equipment will save Teer Co. $125,000 per year in pretax operating costs during its useful life but requires an initial investment in NWC of $50,000. Teer Co. has a 20% tax rate and a required rate of return of 10%. What is the annual...

Company purchased equipment costing $239,000 on January 1, 2022. The equipment was assigned an estimated useful...

Company purchased equipment costing $239,000 on January 1, 2022. The equipment was assigned an estimated useful life of six years and an estimated salvage value of $8,000. The equipment was to be depreciated using the sum-of-the-years-digits' depreciation method. On January 1, 2025, Company revised the life of the equipment from six to thirteen years. Calculate the amount of depreciation expense recorded on the equipment for 2025.

A company buys a piece of equipment for $62,000. The equipment has a useful life of...

A company buys a piece of equipment for $62,000. The equipment has a useful life of five years. No residual value is expected at the end of the useful life. Using the double-declining-balance method, what is the company's depreciation expense in the first year of the equipment’s useful life? (Do not round intermediate calculations) $12,400. $24,800. $15,500. $31,000. An asset is purchased on January 1 for $47,200. It is expected to have a useful life of four years after which...

On Jan 3, 2017, Limestone Enterprises purchased equipment for $134,500. The equipment has a useful life...

On Jan 3, 2017, Limestone Enterprises purchased equipment for $134,500. The equipment has a useful life of five years or of 15,000 working hours and after the useful life it will have a residual value of $12,000. The machine was used for 1,400 hours in 2017, 2,100 hours in 2018; 3,700 hours in 2019. Required: 1. Calculate the depreciation expense for 2017 and 2018 under each of the following methods: i. Straight-line, ii. Double diminishing-balance, and iii. Units-of -production 2. Record the journal entry for...

On Jan 2, 2018, Sandstone Enterprises purchased equipment for $129,200. The equipment has a useful life...

On Jan 2, 2018, Sandstone Enterprises purchased equipment for $129,200. The equipment has a useful life of four years or of 13,000 working hours and after the useful life it will have a residual value of $13,500. The machine was used for 1,900 hours in 2018, 2,800 hours in 2019; 3,700 hours in 2020. Required: Calculate the depreciation expense for 2018 and 2019 under each of the following methods: Straight-line, Double diminishing-balance, and Units-of -production Record the journal entry for...

On Jan 2, 2017, Sandstone Enterprises purchased equipment for $129,200. The equipment has a useful life...

On Jan 2, 2017, Sandstone Enterprises purchased equipment for $129,200. The equipment has a useful life of four years or of 12,000 working hours and after the useful life it will have a residual value of $14,000. The machine was used for 1,900 hours in 2017, 2,800 hours in 2018; 3,700 hours in 2019. Required: Calculate the depreciation expense for 2017 and 2018 under each of the following methods: Straight-line, Double diminishing-balance, and Units-of -production Record the journal entry for...

Question