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Ket [755]
2 years ago
8

You are evaluating a potential purchase of several light-duty trucks. The initial cost of the trucks will be $194,000. The truck

s fall in the MACRS 5-year class that allows depreciation of 20% the first year, 32% the second year, 19% the third year, 12% the fourth year, 11% the fifth year, and 6% the sixth year. You expect to sell the trucks for 29,100 at the end of five years. The expected revenue associated with the trucks is $155,000 per year with annual operating costs of $81,000. The firm's marginal tax rate is 25.0%. What is the after-tax cash flow associated with the sale of the equipment
Business
1 answer:
pantera1 [17]2 years ago
5 0

The after-tax cash flow associated with the sale of equipment is $299,325.

<h3>What is an initial cost?</h3>
  • The initial cost is the typical cost of buying or producing the goods you have on hand.
<h3>What is an operating cost?</h3>
  • Operating costs, often known as operating costs, are the costs associated with running a company, or with running a machine, part, piece of equipment, or facility.
  • They represent the cost of the resources an organization uses just to stay in business.
<h3>What is cash flow?</h3>
  • The actual or fictitious movement of money is known as cash flow.
  • In finance and accounting, cash flow describes the capital inflows and outflows of particular economic units with the aim of achieving a particular goal within a predetermined window of time.
  • Making an accurate prediction of future cash flows is required in accounting in addition to measuring current cash flows.
<h3>Solution -</h3>

Revenue of 5 years = 155000 * 5 = 775000.

Operating cost of 5 years = 81000 * 5 = 405000.

Sale of equipment = 29100.

Net profit = 775000+29100 - 405000=399100.

Tax to be deducted at 25% = 99775.

Cash flow after tax 399100-99775=299325.

Therefore, the after-tax cash flow associated with the sale of equipment is $299,325.

Know more about Initial costs here:

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A firm has a market value equal to its book value. Currently, the firm has excess cash of $300 and other assets of $6,200. Equit
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Answer:

new earnings per share is $1.53

Explanation:

Given data

excess cash = $300

Equity is worth = $5,000

other assets = $6,200

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new earnings per share

solution

we know that equity per value is Equity / stock outstanding

that is

equity per value = (5000 / 500) = 10

equity per value = $10

and

we can purchase equity with excess cash $300 that is

= excess cash / equity per value

purchase equity with excess cash = (300 / 10)  = 30

purchase equity with excess cash = 30 shares

so

after repurchase we have balance share is =  (500 - 30) = 470

balance share = 470 shares

so that

new earnings per share will be = net income / balance share

new earnings per share =  (720 / 470) = 1.53

new earnings per share is $1.53

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3 years ago
Under the franchise model, if pods were to engage in dubious/controversial activities, then franchisees might see a decline in b
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What is the effect on total assets and​ stockholders' equity of paying the telephone bill as soon as it is received each​ month?
Archy [21]

Answer:

Option C) Decrease in Total Assets , and No Effect on Equity

Explanation:

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This movement has no impact in the Sotckholder Equity.

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Barriers to trade reduce the amount of output that can be supplied by foreign companies and, as a result, cause prices in the ma
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Barriers to trade reduce the amount of output that can be supplied by foreign companies and, as a result, cause prices in the market to be higher than they would otherwise be. This results in consumers buying less

<h3>What are barriers to trade?</h3>

Barriers to trade refers as certain hurdles which restrict an individual or organisation to practice trade activity effectively. These barriers can be regulatory barriers, physical barriers and so on.

These trade barriers are launched to support small-scale business and introducing jobs in the industries to prevent unemployment.

These trade barriers results in high prices in the market due to reduce amount output supplied by foreign companies. This will result in less buying behaviour by consumer.

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7 0
2 years ago
Auditors consider fi nancial statement assertions to identify appropriate audit procedures. For
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Answer:

a) 3

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