1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Helga [31]
3 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]3 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
You might be interested in
To the extent that employers conduct a social media background check on job candidates, best practices are all of the following
Grace [21]

Answer:

Limit access to private information by friending someone

Explanation:

When conducting recruitment of an individual employers sometimes do background checks on the person's social media information.

There however needs to be consideration of the person's privacy in doing this.

There should be use of only publicly available information, background check can be done by a third party that is not making hiring decision, and do not request username and password for social media platforms.

It is not best practice to befriend a person on social media in order to obtain their private information.

8 0
3 years ago
Practice Makes Perfect Inc. was started on July 1 of the current year. Practice Makes Perfect provides piano lessons for student
Natalka [10]

Answer:

I used an excel spreadsheet to record this transactions on an accounting equation.  

Practice Makes Perfect, Inc.

Income Statement

For the month ended July 31, 202x

Revenues                                               $2,000

Expenses:

  • Advertising expense $500
  • Rent expense $1,000
  • Wages expense $1,000
  • Supplies expense $300
  • Depreciation expense $750
  • Interest expense $417                 <u> ($3,967)</u>

Net income                                             ($1,967)

Practice Makes Perfect, Inc.

Balance Sheet

For the month ended July 31, 202x

Assets:

  • Cash $99,783
  • Accounts receivables $1,800
  • Supplies $1,700
  • Pianos $47,250

Total assets                                         $150,533

Liabilities:

  • Accounts payable $2,500
  • Notes payable $50,000

Total liabilities                                      $52,500

Stockholders' equity

  • Common stock $100,000
  • Retained earnings ($1,967)

Total stockholders' equity                  $98,033

Total liabilities + equity                      $150,533        

Download pdf
6 0
3 years ago
Armando has a summer job hand-dyeing shirts that will be sold on the boardwalk. He is paid $5.00 per shirt. Armando is being pai
netineya [11]

Answer:

Pay for Performance

Explanation:

Pay for Performance is the strategy which is being referred to as the pay strategy where the evaluations or computations of the individual or the business performance have the influence on the pay amount bonuses or the increases provided to each and every employee.

So, in this case, the person is paid on the performance of the person as he will be paid on the $5 per shirt.

7 0
3 years ago
Required : You are to prepare the Arc's federal income tax return in good form . You are not to complete an Ohio state income ta
Oduvanchick [21]
D
D
D
s
S
S
As
Dssss


- Harvard university professor
4 0
3 years ago
Read 2 more answers
Lito is working with a discount broker.Which service would Lito not be likely to receive?
EleoNora [17]

Answer: face to face consultations

7 0
3 years ago
Other questions:
  • The actual cost of direct materials is $ 12.50 per pound. The standard cost per pound is $ 9.00. During the current​ period, 9 c
    8·1 answer
  • A company sold equipment for $100,000; the equipment had cost $300,000 and had accumulated depreciation of $180,000. The company
    14·1 answer
  • When they are first​ born, Grandma gives each of her grandchildren a ​$4 comma 000 savings bond that matures in 18 years. For ea
    10·1 answer
  • Burgundy Manufacturing uses a process cost system and computes cost using the weighted average method. During the current period
    14·1 answer
  • Bonita Industries had 205000 shares of common stock, 19100 shares of convertible preferred stock, and $1496000 of 5% convertible
    5·1 answer
  • How has technology changed in education
    5·1 answer
  • Suppose the Herfindahl indexes for industries A, B, and C are 1,200, 5,000, and 7,500 respectively. These data imply that: Group
    9·1 answer
  • ABC Company had addition to retained earnings for the current fiscal year just ended of $395,000. The firm paid out $195,000 in
    12·1 answer
  • Dream face revealed haha lol
    9·2 answers
  • Consumers who read, hear, or see the message sent by a source during the marketing communication process are referred to as rece
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!