Yearly taxable income is considering two alternatives

Reference no: EM1330868

Depreciation, Investment Appraisal

This two problems MUST be done in excel format. Please include explanation

1. Office equipment whose initial cost is $100,000 has an estimate actual life of 6 years , with an estimated salvage value of $10,000. Prepare tables listing the annual cost of depreciation and the book value at the end of each 6 years , based on the straight line , sum of years digits and MACRS depreciation.

2. A corporation with $7 million in annual taxable income is considering two alternatives:

Year Alternative1 Alternative2
0 -$10,000 -$20,000
1-10 $4500 $4500
11-20 $0 $4500

Both alternatives will be depreciated by straigh -line depreciation assuming a 10 year depreciable life and no salvage value.Neither alternative is to be replaced at the end of its useful life. If the corporation has a minimum atractive rate of retun of 10% after taxes , which alternative should i choose? Solve the problem by:

Present Worth Analysis
Annual Cash Flow Analysis
Rate of Retun Analyis
Future Worth Analyis
Benefit-Cost ratio analyis

Reference no: EM1330868

Questions Cloud

Discuss the costs : Discuss the many costs that businesses face today.

Describe the process of mind mapping : Describe the process of mind mapping. Mind mapping begins with a project name. Develop a "project name" and potential deliverables to go along with the core project and Report the project name and the potential deliverables.

Important characteristic for leader in twenty first century : Explain what you believe will be the single most important characteristic for a leader in the 21st century.

Results of whistle blower : Select a current newspaper article on the topic covered in this lesson. Summarize and discuss the key legal issue or issues addressed in the article, including the relevant facts.

Yearly taxable income is considering two alternatives : A corporation among $7 million in yearly taxable income is considering two alternatives

Prepare strategy for stakeholder communication : Report on Policy Implementation - Prepare strategy for stakeholder communication, participation and consultation.

Strategies to accelerate cash : Can you describe these strategies and also the potential costs involved with each action?

The ethical culture of the organization : Managing the ethical culture of the organization.

Determining cost of capital and project risk : Cascade Water Company (CWC) currently has 30,000,000 shares of common stock out- standing that trade at a price of $42 per share. CWC also has 500,000 bonds outstanding that currently trade at $923.38 each.

User Account

All Pages