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aleksandrvk [35]
3 years ago
10

Your firm needs a machine which costs $260,000, and requires $47,000 in maintenance for each year of its 10 year life. After 5 y

ears, this machine will be replaced. The machine falls into the MACRS 10-year class life category. Assume a tax rate of 40% and a discount rate of 14%. What is the depreciation tax shield for this project in year 10?
Business
1 answer:
Aleks04 [339]3 years ago
3 0

Answer:

nominal tax shield in year 10: 6,812 dollars

present value of the tax shield: 1,837.49

Explanation:

the nominal tax shield in year 10:

We look into the MACRS table for 10-years property class: 6.55%

The depreciation expense for this year is 260,000 x 6.55% = 17,030

Then this produces a tax shield of 40% 6,812

The nominal tax shield at year 10 is 6,812 dollars

considering time value of money today this tax shield is worth:

\frac{6812}{(1 + 0.14)^{10} } = PV  

PV: 1,837.49

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Kokomochi is considering the launch of an advertising campaign for its latest dessert product, the Mini Mochi Munch. Kokomochi p
alexgriva [62]

Answer:

Kokomochi

The incremental earnings associated with the advertising campaign in its first year is:

= $0.3 million.

Explanation:

a) Data and Calculations:

Advertising campaign cost = $5.5 million

                                                  Mini Mochi     Other Products   Total

                                                      Much

Incremental sales revenue        $8.2 million      1.8 million        $10 million

Incremental cost of goods sold   5.2 million      1.4 million           6.6 million

Incremental gross profit            $3.0 million      0.4 million          3.4 million

Advertising cost                                                                              3.1 million

Incremental earnings associated with the advertising campaign = $0.3 million

Advertising cost apportioned to:

This year = $8.2/$14.4 * $5.5 million = $3.1 million

Next year = $6.2/$14.4 * $5.5 million = $2.4 million

6 0
3 years ago
Jamison's gross tax liability is $7,200. Jamison had $2,625 of available credits and he had $4,400 of taxes withheld by his empl
mina [271]

Answer:

The answer is: Jamison has $175 in taxes due.

Explanation:

To determine the amount of taxes that Jamison still has to pay, we can use the following formula:

Taxes due = tax liability - (taxes withheld by employer + tax credits)

Taxes due = $7,200 - ($4,400 + $2,625) = $7,200 - $7,025 = $175

Jamison has $175 in taxes due.

7 0
3 years ago
By lowering production costs, subsidies help foreign competitors gain export markets. True or False
Luden [163]

Answer:

False

Explanation:

Whenever, there will be reduced production costs, due to any reason in the economy, then the goods will be cheaper and accordingly the sale will be in abundance assuming other factors remain constant.

Thus, due to subsidies the cost to producers will be less and then exporters will not be able to get more share as domestic goods will cost cheaper.

Thus, there will not be any gain to foreign competitors in our domestic markets, as they will not get any share extra rather they will loose as a foreign competitor. In fact goods which are exported will also cost low, and therefore, will gain new customers.

Therefore, above stated statement is false.

5 0
3 years ago
Explain how the external environment, organizational size, technology, and strategy are relevant when designing an organizationa
Gre4nikov [31]

Answer:

The organizational structure refers to the way in which a company's resources are organized, that is, it is the way in which the company is divided into departments, positions and tasks, and thus operates effectively towards its objectives and market goals.

Understanding the concept of organizational structure, we realize how necessary it is to understand the internal and external variables of an organization such as its macro environment, its size, technology and strategy before designing the organizational structure, as this will be decisive in making the business well positioned and competitive in the market, as the structure must be aligned with the organization's purposes, as an ideal structure brings several advantages to the business, such as:

  • improved productivity, improved internal and external communication, better time management, greater responsibility, greater job satisfaction, greater integration, greater control of resources, etc.
6 0
3 years ago
The Sea Wharf Restaurant would like to determine the best way to allocate a monthly advertising budget of $2,000 between newspap
Art [367]

Answer:

Explanation is given below

Explanation:

Given that, the total budget for the media is only $1,000 per month.

For the allocation, each type of media would get at least 25% of the budget.

Hence, from the available information, we have the following:

Parameters:

$1000 = Monthly advertising budget

25%= Minimum spending for each type of media

50 = Value of the index for local newspaper advertising

80= Value of the index for spot radio advertising

Decision variables;

x1= Newspaper advertising budget

x2= Radio advertising budget

LP Model;

Maximize Z=50x1+ 80x2

Subject to:x1+ x2≤1000

x1≥ 250

x2≥ 250

x1,x2≥ 0

p.s. OptimumZ=72, 500,

x1=250,

x2=750

6 0
3 years ago
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