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maks197457 [2]
2 years ago
10

Last year, Michelson Manufacturing reported $10,250 of sales, $3,500 of operating costs other than depreciation, and $1,250 of d

epreciation. The company had no amortization charges, it had $3,500 of bonds outstanding that carry a 6.5% interest rate, and its federal-plus-state income tax rate was 40%. This year's data are expected to remain unchanged except for one item, depreciation, which is expected to increase by $725. By how much will the depreciation change cause the firm's net after-tax income and its net cash flow to change? Note that the company uses the same depreciation calculations for tax and stockholder reporting purposes.a. -$383.84; $206.68b. -$425.30; $229.01c. -$435.00; $290.00d. -$471.25; $253.75e. -$404.04; $217.56

Business
1 answer:
svet-max [94.6K]2 years ago
6 0

Answer:

c. -$435.00

The answer and procedures of the exercise are attached in a microsoft excel document.

Explanation:

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  

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Dole, the sole owner of Enson Corp., transferred a building to Enson. The building had an adjusted tax basis of $35,000 and a fa
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Answer:

C. $40,000

Explanation:

For computing the amount of the gain recognized, first we have to calculate the gain recognized based on the adjusted basis

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= $100,000 -$35,000

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But the cash is received for $40,000. So, only $40,000 of gain would be recognized. As in the case of transfer, if the amount is received other than the stock so the amount which is received is recognized as a gain i.e $40,000

4 0
3 years ago
Suppose the tax rate on the first​ $10,000 income is 0​ percent; 10 percent on the next​ $20,000; 20 percent on the next​ $20,00
olasank [31]
  <span>Family A: marginal rate 20%, average rate 10%</span><span> 

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Family A: </span><span>
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total income $40,000: this includes $10,000 at 0%, $20,000 at 10% (tax of $2,000), and $10,000 at 20% (tax of $2,000). The last rate paid is 20% so that is the marginal rate; the total tax paid is $4,000, divide that by $40,000 total income, that is the average rate. </span><span>

Family B: </span><span>
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total income $100,000: this includes $10,000 at 0%, $20,000 at 10% (tax of $2,000), $20,000 at 20% (tax of $4,000), $30,000 at 30% (tax of $9,000), and $20,000 at 40% (tax of $8,000). The last rate paid is 40% so that is the marginal rate; the total tax paid is $23,000, divide that by $100,000 total income, that is the average rate.</span>
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3 years ago
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Yakvenalex [24]
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I hope to helped you!
4 0
3 years ago
Read 2 more answers
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Evgen [1.6K]

Answer:

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