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?
zorn conducted his professional practice through zorn, inc. the corporation uses a fiscal year ending september 30 even though the business purpose test for a fiscal year cannot be
Changes in accounting estimates In preparing financial statements, it may be difficult to arrive at exact values for certain items to be presented in the financial statements and
business is started with the objective of making profits but the conservatism concept says not to anticipate profit.... why so??
Assume you are receiving an amount of Rs.5000 twice in a year for subsequent five years one time at the starting of the year and another amount of Rs. 5000 at the ending of the yea
The following items represent liabilities on a firm's balance sheet: a. An amount of money owed to a supplier based on the terms 2/20, n/40, for which no note was executed. b. An a
Business start up accounting transactions: Jane Whitfield, a sole proprietor, established the JW Flower Shop on January 2, 2010. The following transactions have occurred during
The appropriate treatment of Cash flow in respect of the following items as per US GAAP & FASB - (230-10) 1. Receipt of Insurance settlement proceeds of $2 mill. From an intern
the salaries paid in 2004 is rs. 500000 salaries outstanding is rs.20000 salaries paid in advance for 2004 is rs 30000 what is the actual salary expenditure for 2004?
Create a description of your company and its primary business activities. Include: a) A brief historical summary b) The lines of business the firm is engaged in (Is the compa
Berg Company adopted a stock-option plan on November 30, 2013, that provided that 73,200 shares of $5 par value stock be designated as available for the granting of options to offi
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