The taylor corporation is using a machine that initially

Assignment Help Financial Accounting

Reference no: EM13370264

The Taylor Corporation is using a machine that initially cost $66,000. The machine has a book value of $66,000 and a present market value of $40,000. The asset is in the Class 5 CCA pool which allows 35 percent depreciation per year. It will have no salvage value after 5 years and the company tax rate is 40%. Jacqueline Elliott, the Chief Financial Officer of Taylor, is considering replacing this machine with a new model costing $70,000. The new machine will cut operating costs by $10,000 every year for the next five years. Taylor's cost of capital is 8%. Should the firm replace the asset?

Reference no: EM13370264

Questions Cloud

How do you judge a businesss well-being from examining its : how do you judge a businesss well-being from examining its capital structure? does it make a difference who you are

Red blue white and magenta have taxable income as : red blue white and magenta have taxable income as givencorporation taxable amountblue 91000white 320000red

Lizzie shoes experience gift cards that have not been : lizzie shoes experience gift cards that have not been redeemed within 12 months are not probable to be redeemed. lizzie

Show the proper accounting treatment of the 273000 714000 - : show the proper accounting treatment of the 273000 714000 - 441000 by which the cost of first machine exceeded the cost

The taylor corporation is using a machine that initially : the taylor corporation is using a machine that initially cost 66000. the machine has a book value of 66000 and a

In the present year the doe partnership received revenues : in the present year the doe partnership received revenues of 100000 and paid the subsequent amounts 20000 in rent and

For each of the subsequent independent situations show the : for each of the subsequent independent situations show the reason for and the type of audit report that you would

At an output level of 73000 units you evaluate that the : at an output level of 73000 units you evaluate that the degree of operating leverage is 2.90. the output rises to 78000

In january 2010 the free cancer foundation established an : in january 2010 the free cancer foundation established an endowment of 500000 the income from which is restricted to

User Account

All Pages