Determine total depreciation to be taken over useful life

Assignment Help Financial Management
Reference no: EM13942941

Futabatei Enterprises purchased a delivery truck on January 1, 2014, at a cost of $44,550. The truck has a useful life of 7 years with an estimated salvage value of $9,900. The straight-line method is used for book purposes. For tax purposes, the truck, having an MACRS class life of 7 years, is classified as 5-year property; the optional MACRS tax rate tables are used to compute depreciation. In addition, assume that for 2014 and 2015 the company has revenues of $330,000 and operating expenses (excluding depreciation) of $214,500. Incorrect answer. Your answer is incorrect. Try again. Compute income before income taxes for 2014 and 2015. 2014 2015 Income before income taxes $Entry field with incorrect answer $Entry field with incorrect answer SHOW SOLUTION LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Compute taxable income for 2014 and 2015. (Round answers to 0 decimal places, e.g. 45,892.) Taxable income for 2014 $Entry field with incorrect answer Taxable income for 2015 $Entry field with incorrect answer SHOW SOLUTION LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Determine the total depreciation to be taken over the useful life of the delivery truck for both book and tax purposes. Book purposes $Entry field with incorrect answer Tax purposes $Entry field with incorrect answer

Reference no: EM13942941

Questions Cloud

Pick the least-expensive car for your new delivery service : You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $17,500 to purchase and which will have OCF of –$1,900 annually throughout the vehicle’s expected life of three years as..
Stock returns have covariance with the market portfolio : Neon Corporation’s stock returns have a covariance with the market portfolio of .0375. The standard deviation of the returns on the market portfolio is 20 percent, and the expected market risk premium is 9.1 percent. The expected unlevered cash flows..
What is the present value of the stock : A share of Ryan & Co. common stock is expected to pay a dividend of $2.40 ( D 1 ) at the end of the coming year. If the expected long-run growth rate for this stock is 6%, and if investors require a 18% rate of return, what is the present value of th..
What is the expected value of return : Under normal conditions (70% probability), Plan A will produce a $20,000 higher return than Plan B. Under tight money conditions (30% probability), Plan A will produce $100,000 less than Plan B. What is the expected value of return?
Determine total depreciation to be taken over useful life : Futabatei Enterprises purchased a delivery truck on January 1, 2014, at a cost of $44,550. The truck has a useful life of 7 years with an estimated salvage value of $9,900. The straight-line method is used for book purposes. Determine the total depre..
What is their yield to maturity : ABC Corp.'s bonds currently sell for $1,180 and have a par value of $1,000. They pay a $50 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100. What is their yield to maturity (YTM)?
Value of one-year european put option with a strike price : A stock price is currently $100. Over each of the next two six-month periods it is expected to go up by 10% or down by 10%. The risk-free interest rate is 8% per annum with continuous compounding. What is the value of a one-year European put option w..
Determine the market value of the bond : A corporate bond has a face value of $1000 with maturity date 20 years from today. The bond pays interest semi annually at a rate of 8% per year based on the face value. The interest rate paid on similar corporate bonds has decreased to a current rat..
Treasury offers to sell you a bond : Suppose the U.S. Treasury offers to sell you a bond for $3,000. No payments will be made until the bond matures 15 years from now, at which time it will be redeemed for $5,600. What interest rate would you earn if you bought this bond at the offer pr..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Explain what is the required rate of return on the stock

The company just paid a $1.80 dividend and plans to pay $1.86 next year. The dividend growth rate is expected to remain constant at the current level. What is the required rate of return (%) on this stock?

  A firms preferred stock pays an annual dividend

A firm's preferred stock pays an annual dividend of $4, and the stock sells for $73. Flotation costs for new issuances of preferred stock are 7% of the stock value. What is the after-tax cost of preferred stock if the firm's tax rate is 35%?

  Pretax cost savings-computer-based order entry system

Your firm is contemplating the purchase of a new $565,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $57,000 at the end of that time. You will be able to reduce wo..

  Central credit union is offering

Central Credit Union is offering 6.7 percent compounded daily on its savings accounts. If you deposit $5,100 today, how much will you have in the account in 5 years? In 10 years? In 20 years?

  Contribution margin per unit

Product A has a contribution margin per unit of $500 and required 2 hours of machine time. Product B has a contribution margin per unit of $1,000 and requires 5 hours of machine time. How much of each product should be produced given there are 100 ho..

  Emerging performance management topics

Create a post that presents your view of one or two key emerging performance management topics in current academic or professional debates. Provide references. Present the topics discussed in the articles and explain their importance to the field ..

  What amount of new investment income

Crappola Hospital outside of Outback, UT has been thinking about changing its’ payroll period from a bi weekly to a monthly. The administrator, Baskitcase says they currently have 600 employees with an annual payroll of $18 million. what amount of ne..

  If behavioral finance holds

If behavioral finance holds, this implies:

  Issuance costs for external finances

Ford Motors expects a new hybrid-engine project to produce incremental cash flows of $74 each year and expects these to grow at a rate of 0.05 each year. The upfront project costs are $559 and Ford's weighted average cost of capital is 0.07. If the i..

  What is the price of the stock ex-rights

ABC Company is currently quoted at 53 on NASDAQ. A Rights Offering has been declared with an exercise price of 48, and 4.92 rights are needed to buy a new share. If you own 10 round lots of this company, answer the following: What is the value of a r..

  What factors affect future movements in value of the euro

Factors affecting exchange rates. What factors affect the future movements in the value of the euro against the dollar?

  Investor be expected to pay per share five years into future

A stock is expected to pay $0.80 per share every year indefinitely. If the current price of the stock is $18.90, and the equity cost of capital for the company that released the shares is 6.4%, what price would an investor be expected to pay per shar..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd