A new barcode reading device has an installed cost basis of $20,760 and an estimated service...

A new barcode reading device has an installed cost basis of $20,760 and an estimated service life of nine years. It will have a zero salvage value at that time. The 200% declining balance method is used to depreciate this asset.

a. What will the depreciation charge be in year nine?

b. What is the book value at the end of year eight?

c. What is the gain (or loss) on the disposal of the device if it is sold for $500 after eight years?

Expert Solution

I have tried to explain you the answer which each and every step and with written formulas in the image.PLEASE GIVE YOUR VALUABLE REVIEWS ABOUT THE ANSWER IN THE COMMENT BOX AND YOU CAN ALSO GIVE THUMBS UP IF YOU LIKE THE ANSWER.

THANK YOU.

Rahul Sunny answered 1 year ago

7-5. A new barcode reading device has an installed cost basis of $24,750 and an estimated...

7-5. A new barcode reading device has an installed cost basis of $24,750 and an estimated service life of seven years. It will have a zero salvage value at that time. The 200% declining balance method is used to depreciate this asset. a. What will the depreciation charge be in year seven? b. What is the book value at the end of year six? c. What is the gain (or loss) on the disposal of the device if it is...

A proposed cost-saving device has an installed cost of $800,000. The device will be used in...

A proposed cost-saving device has an installed cost of $800,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $81,000, the marginal tax rate is 23 percent, and the project discount rate is 8 percent. The device has an estimated Year 5 salvage value of $124,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

A proposed cost-saving device has an installed cost of $815,000. The device will be used in...

A proposed cost-saving device has an installed cost of $815,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $87,000, the marginal tax rate is 21 percent, and the project discount rate is 11 percent. The device has an estimated Year 5 salvage value of $133,000. What level of pretax cost savings do we require for this project to be profitable? What...

A proposed cost-saving device has an installed cost of $705,000. The device will be used in...

A proposed cost-saving device has an installed cost of $705,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $115,000, the marginal tax rate is 22 percent, and the project discount rate is 13 percent. The device has an estimated Year 5 salvage value of $86,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

A proposed cost-saving device has an installed cost of $725,000. The device will be used in...

A proposed cost-saving device has an installed cost of $725,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $135,000, the marginal tax rate is 21 percent, and the project discount rate is 13 percent. The device has an estimated Year 5 salvage value of $98,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

A proposed cost-saving device has an installed cost of $585,000. The device will be used in...

A proposed cost-saving device has an installed cost of $585,000. The device will be used in a five-year project but is classified as three-year MACRS (MACRS Table) property for tax purposes. The required initial net working capital investment is $45,000, the marginal tax rate is 35 percent, and the project discount rate is 12 percent. The device has an estimated Year 5 salvage value of $65000. Required: What level of pretax cost savings do we require for this project...

A proposed cost-saving device has an installed cost of $820,000. The device will be used in...

A proposed cost-saving device has an installed cost of $820,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $89,000, the marginal tax rate is 22 percent, and the project discount rate is 8 percent. The device has an estimated Year 5 salvage value of $136,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

a proposed cost-saving device has an installed cost of 725000. The device will be used in...

a proposed cost-saving device has an installed cost of 725000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is 135000, the marginal tax rate is 21 percent, and the,project discount rate is 13 percent. The,device has an estimated Year 5 salvage value of 98000. what level of pretax cost saving do,we require for this project to be profitable? yr 3 yr 5...

A proposed cost- saving device has an installed cost of $735,000. The device will be used...

A proposed cost- saving device has an installed cost of $735,000. The device will be used in a five year project but is classified as a three year MACR property for tax purposes. The required initial net working capital investment is $55,000, the tax rate is 22 percent and the project discount rate is 9 percent. The device has an estimated Year 5 salvage value of $85,000. What level of pretax cost savings do we require for this project to...

A proposed cost-saving device has an installed cost of $790,000. The device will be used in...

A proposed cost-saving device has an installed cost of $790,000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is $77,000, the marginal tax rate is 21 percent, and the project discount rate is 10 percent. The device has an estimated Year 5 salvage value of $118,000. What level of pretax cost savings do we require for this project to be profitable? MACRS...

Question