Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
You are considering whether to replace an existing flow meter in an ongoing operation. A change in the meter will have not affect revenues but will reduce costs. The existing meter can be sold now for $50 or it can be sold in one year for $10. It will cost $35 (in yearend values) to operate and maintain for one year and $75 (in yearend values) to operate and maintain for a second year. A new electronic meter costs $400 and has a 10 year life. At the end of the ten-year life you expect to be able to sell the new meter for $40. The new meter costs only $14 per year to operate and maintain. Assume the appropriate risk-adjusted cost of capital is 12%.
(a) If there were no taxes, what would you recommend?
(b) Now suppose there is a corporate tax rate of 34%, the book value of the old meter is zero while the new meter can be depreciated straight-line over 10 years. Would your recommendation change?
(c) How does the percentage change in the cost of keeping the old meter before and after the tax compare with the percentage change in the cost of a new meter as a result of the tax?
(d) What feature of the tax system results in the asymmetric effect of the tax on the cost of the old and new meter?
48 Morgado Inc. has provided the following data to be used in evaluating a proposed investment project: Initial investment $130,000 Annual cash receipts $78,000 Life of th
What can a financial institution often do for a deficit economic unit (DEU)that it would have difficulty doing for itself if the DEU were to deal directly with an SEU?
Assignments of book debts The trustee can set aside an assignment of existing or future book debts, whether absolute or by way of charge, unless the assignment was registered a
Do you anyone on staff with the above experience? Notes cannot be copied from any real company''s financial report.
Suppose that the annual rate of interest is 4%. (a) What is the monthly rate? (b) Consider a 3-year lease on a car that is worth $20,000 today. The first payment on the lease
Q. Cost related issue of debt? Debt is cheaper in comparison of equity because debt is less risky from an investor point of view. This is for the reason that it is often secure
Wendy is evaluating a capital budgeting project that should last for 4 years. The project requires $ 800,000 of equipment. She is unsure what depreciation method to use in her anal
Who are the users of accounting information? For accounting information to be useful, accountant should be clear for whom the information is being prepared and for what purpose
Ordinary Income - One of two classes of income (other being CAPITAL GAINS) taxed under the INTERNAL REVENUE CODE. Factually, ordinary income is taxed at a higher rate than capital
CHARACTERISTICS OF PARTNERSHIP
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd