Taxation - opportunity cost of capital and tax rate given, Taxation

BBQ Beach corporation manufactures inflatable air-matresses and life jackets for summer fun. the firm is considering replacement of their existing production line (CCA Class 8, d=20%) to reduce operating costs by $200,000 annually. Revenues are expected to rise by $100,000 per year, which will increase accounts receivable which are 15% of revenues. The new purchase line will cost $900,000 and will have a salvage value of $240,000 in seven years, when the company will reassess the viability of the business. The old equipment is worth $70,000 today and will be worth nothing in seven years.

If BBQ Beach has a tax rate, t=35%, and its opportunity cost of capital is 12%, then should the company replace the equipment? please draw a timeline.

Posted Date: 7/29/2012 1:55:35 PM | Location : United States







Related Discussions:- Taxation - opportunity cost of capital and tax rate given, Assignment Help, Ask Question on Taxation - opportunity cost of capital and tax rate given, Get Answer, Expert's Help, Taxation - opportunity cost of capital and tax rate given Discussions

Write discussion on Taxation - opportunity cost of capital and tax rate given
Your posts are moderated
Related Questions
I still don''t know this yet but my teacher wants me to do this a i don''t know this topic?

Complete the following problems located in Taxation of Individuals and Business Entities: • Comprehensive Problem 67 (Ch. 5) using Microsoft Excel, except prepare the computations

The following assignment is due the last day of class or at the final exam, in hard copy format only. You may complete the assignment in groups of 2-4, if desired. Indicate your

Question 1: (a) Why does Government intervene in the market's allocation of resources even if the economy is Pareto efficient? (b) What are the principal reasons why marke

I am zainab ali, i want help in Tax assignment..   In 2012 Joe, age 15, earned $2900 from acting and had $12,200 of interest income and $14,000 of taxable qualified dividend

Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6789. Roberta has been divorced from her former husb

How to raise an invoice with WCT for Civil construction job in Andar pradesh

Using tax software, file out federal and california tax form! Plus cover letter

meaning of vat

c program to input the salary and output payable tax using the following information salary tax 10,000-20,000 2% 20,000-35,000 4% 3