"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 4.8% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $12,815.
- The tax rate is 30%.
- The revenue for year 1 is $30,000 and $22,000 for year 2.
- O&M for year 1 is $9,000 and $11,900 for year 2.
- The interest paid on the debt is $1726 for year 1 and $894 for year 2.
- The taxable income is $10,843 for year 1 and $1,981 for year 2.
- The income taxes are $3,253 for year 1 and $594 for year 2.
- The milling machine costs $59,000.
- The salvage value at the end of year 2 is $47,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

1. If a taxpayer has gains and losses from an activity, are they better off classifying the activity as a hobby or as a business? Explain why.

Mr. D works full-time as a systems analyst for a consulting firm. In addition, he sells plants that he raises himself in a greenhouse attached to his residence. During the past 5 years, the results from raising and selling the plants have been as follows: Year Net Profit (Loss) from Scenario 1:

2. Please create a scenario (Scenario 2) where the cumulative profits in years 1-4 are still $300 but the taxpayer would be in a better position regarding year 5 losses.

3. Comment on your answer to 2 above. Why is Scenario 2 better for the taxpayer? You may also show your erudition by citing, referencing, and attaching additional sources

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 2.6% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $26,571.
- The tax rate is 38%.
- The revenue for year 1 is $40,000 and $36,000 for year 2.
- O&M for year 1 is $8,000 and $11,000 for year 2.
- The interest paid on the debt is $2743 for year 1 and $1409 for year 2.
- The taxable income is $19,111 for year 1 and $14,897 for year 2.
- The income taxes are $7,262 for year 1 and $5,661 for year 2.
- The milling machine costs $71,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 4.7% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $15,796.
- The tax rate is 39%.
- The revenue for year 1 is $36,000 and $27,000 for year 2.
- O&M for year 1 is $12,000 and $13,500 for year 2.
- The interest paid on the debt is $2427 for year 1 and $1264 for year 2.
- The taxable income is $12,713 for year 1 and $4,644 for year 2.
- The income taxes are $4,958 for year 1 and $1,811 for year 2.
- The milling machine costs $62,000.
- The salvage value at the end of year 2 is $47,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

1. Missing Statement Items, Available-for-Sale Securities

   Highland Industries Inc. makes investments in available-for-sale securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative balance sheets, are as follows:

   There were no dividends.

   Determine the missing items. If required, use the minus sign to indicate a net or operating loss, unrealized losses, or a credit balance in the valuation allowance account.

   Highland Industries Inc.
   Selected Income Statement Items
   For the Years Ended December 31, Year 2 and Year 3
   	Year 2	Year 3
   Operating Income (Loss)	$	$
   Gain (Loss) from Sale of Investments	4,980	(9,960)
   Net Income (Loss)	$	$(13,700)

   Highland Industries Inc.
   Selected Balance Sheet Items
   December 31, Year 1, Year 2, and Year 3
   	Dec. 31, Year 1	Dec. 31, Year 2	Dec. 31, Year 3
   Assets
   Available-for-Sale Investments, at Cost	$97,110	$84,660	$118,280
   Valuation Allowance for Available-for-Sale Investments	6,230	(7,470)
   Available-for-Sale Investments, at Fair Value
   Stockholders' Equity
   Unrealized Gain (Loss) on Available-for-Sale Investments			(8,720)
   Retained Earnings	$204,180	$288,840	$

Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:

Variable costs per unit: Manufacturing: Direct materials $ 23 Direct labor $ 16 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 50,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $56 per unit.

Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 2. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.

I cant follow this answer, please break it down better. Please resend this answer

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 2.6% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $26,571.
- The tax rate is 38%.
- The revenue for year 1 is $40,000 and $36,000 for year 2.
- O&M for year 1 is $8,000 and $11,000 for year 2.
- The interest paid on the debt is $2743 for year 1 and $1409 for year 2.
- The taxable income is $19,111 for year 1 and $14,897 for year 2.
- The income taxes are $7,262 for year 1 and $5,661 for year 2.
- The milling machine costs $71,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 2.6% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $26,571.
- The tax rate is 38%.
- The revenue for year 1 is $40,000 and $36,000 for year 2.
- O&M for year 1 is $8,000 and $11,000 for year 2.
- The interest paid on the debt is $2743 for year 1 and $1409 for year 2.
- The taxable income is $19,111 for year 1 and $14,897 for year 2.
- The income taxes are $7,262 for year 1 and $5,661 for year 2.
- The milling machine costs $71,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 4.9% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $11,808.
- The tax rate is 36%.
- The revenue for year 1 is $46,000 and $42,000 for year 2.
- O&M for year 1 is $12,000 and $13,100 for year 2.
- The interest paid on the debt is $1722 for year 1 and $895 for year 2.
- The taxable income is $22,275 for year 1 and $19,434 for year 2.
- The income taxes are $8,019 for year 1 and $6,996 for year 2.
- The milling machine costs $70,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 4.9% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $11,808.
- The tax rate is 36%.
- The revenue for year 1 is $46,000 and $42,000 for year 2.
- O&M for year 1 is $12,000 and $13,100 for year 2.
- The interest paid on the debt is $1722 for year 1 and $895 for year 2.
- The taxable income is $22,275 for year 1 and $19,434 for year 2.
- The income taxes are $8,019 for year 1 and $6,996 for year 2.
- The milling machine costs $70,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."