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Helga [31]
4 years ago
11

Rosman Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Rosm

an estimated the following costs and revenues for the project:
Cost of new equipment needed $ 500,000
Sale of old equipment no longer needed $ 96,000
Working capital needed $ 81,000
Equipment maintenance in each of Years 3 and 4 $ 36,000
Annual revenues and costs:
Sales revenues $ 570,000
Variable expenses $ 255,000
Fixed out-of-pocket operating costs $ 132,000
The new piece of equipment mentioned above has a useful life of five years and zero salvage value. The old piece of equipment mentioned above would be sold at the beginning of the project and there would be no gain or loss realized on its sale. Rosman uses the straight-line depreciation method for financial reporting and tax purposes. The company’s tax rate is 30% and its after-tax cost of capital is 13%. When the project concludes in five years the working capital will be released for investment elsewhere within the company.
Required:
1. Calculate the annual income tax expense for each of years 1 through 5 that will arise as a result of this investment opportunity.
2. Calculate the net present value of this investment opportunity.
Business
1 answer:
vovangra [49]4 years ago
8 0

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Download xlsx
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When a home is hit with a assessment to pay for an improvement in the neighborhood such as sidewalk repair, or paving a road, or
enyata [817]

Answer:

Brokers must disclose the information regarding the improvement and the fact that the property's taxes will increase the next year. Neighborhood improvements are paid by  Special Assessment Districts adding taxes to existing properties or increasing sales taxes. Buyers need to know what property taxes they are expected to pay, and in this case, the current property taxes must be adjusted to show the real amount that will  be paid in the future.

This isn't something necessarily bad because you are going to pay higher taxes, but your neighborhood is also improving.

8 0
3 years ago
Stewart soaps began business by issuing 25,000 shares of $5 par value common stock for $20 per share. during its first year, the
larisa [96]
Issuing 25,000 shares of $5 par value common stock for $20 per share.

Cash (25,000 x 20)                           500,000
         Common stock (25,000 x 5)                          125,000
         Additional Paid-In Capital (25,000 x 15)           375,000
 
The net loss will only be reflected as a deduction from retained earnings. Retained earnings is where the net income or net loss of the company will be under in the year-end balance sheet. It is the balance of all income and loss the company has since its inception. 
6 0
4 years ago
A Bathtub model of the start of the Great Depression would show the water level becoming lower with Investment inflow being less
Aneli [31]

Answer:

LESSER THAN

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4 0
3 years ago
Identify the claim. ""The cost of poor health among uninsured people was almost $125 billion in 2004. "" ""The financial burden
romanna [79]

The condition of uninsured people in the United States is very well written in the paragraph where it highlights the fact that uninsured people are less likely to receive care and more likely to have poor health status.

<h3>What do you mean by medically uninsured?</h3>

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Uninsured are not eligible for Medicaid, which is the safety net for most Americans, because they do not qualify for country-based benefits, dependent assistance families, or do not meet other financial or class conditions.

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Thus, we can say that uninsured people are less likely to receive care and more likely to have poor health status due to lack of finance.

To learn more about medically uninsured, refer to the link:

brainly.com/question/25793763

7 0
3 years ago
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Answer:

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