In order to determine the after-tax cash flows for production equipment, the following analysis table was prepared. Based on the partial information on the table, and using an income tax rate of 24%, answer thefollowing question:Calculate the ATCF for year 2A. $9,074B. $7,390C. $11,566OD. $3,138○ E. $4,150Year0BTCFDepreciationTaxable Income Income TaxesATCF- $18,0001$8,700$1,8002$8,700$3,240$1,310??3$8,700$2,5923$6,300

The objective of the question is to calculate the After-Tax Cash Flow (ATCF) for year 2 based on the…

Answered: In order to determine the after-tax…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In year 0 you purchase an asset for $500,000 and in year 1 you receive a positive cash flow of s100,000 from operating the asset. Following a MACRS 7-year depreciation schedule (year 1 recovery rate of 14.29 percent) and assuming you are in a 39% tax bracket, what is your year 1 after tax cash flow (ATCF) to the nearest $50 ? a) $400,000 b) $28,550 c) $11,250 d) $88,750 e) $380,750
What is the expected after-tax cash flow from selling a piece of equipment if Probst purchases the equipment today for $542,980.00, the tax rate is 34.3 percent, the equipment will be sold in 3 years for $103,000.00, and the equipment will be depreciated to $60,600.00 over 12 years using straight-line depreciation? $212,549.05 (plus or minus $10) $240,125.11 (plus or minus $10) $109,035.08 (plus or minus $10) -$41,878.05 (plus or minus $10) None of the above is within $10 of the correct answer
4. Last month, a company specializing in wind power plant design and engineering made a capital investment of $460,000 in physical simulation equipment that will be used for at least 5 years, then sold for approximately 30% of the first cost. By law, the assets are MACRS depreciated using a 3-year recovery period. By how much will the sale cause TI and taxes to change in year 5? The TI will increase by $ and the taxes will increase by
Given: Before -Tax Cash Flow (BT-CF) for Kal Tech Systems in 2012 for an equipment that will be depreciated using the SL method with salvage value of $10,000. Year 0 1 2 3 4 5 BT-CF -$120,000 32,000 32,000 32,000 32,000 32,000 Market value - $36,000 What is the after-tax return if the company is in the 34% income tax bracket? The incremental tax rate is 34%. Also, it is known that the before-tax return is 16.65% Group of answer choices 9.65% 11.29% 10.16% 10.99%
In the year 2019, a corporation made $18.8 Million in revenue, $2.2 Million of operating expenses, and depreciation expenses of $6.4 Million. The state income tax rate is 11% and the federal income tax rate is 21%. How much (a) state income tax, and (b) federal income tax will this corporation pay in this tax year? Assume that the state income tax is a tax-deductable expence when filing federal income tax. .... The approximate state income tax is $ Million (Round to three decimal places.) The approximate federal tax is S Million. (Round to three decimal places.) The combined effective income tax rate is%. (Round to the nearest decimal.) The ATCF for the year 2019 is $ Million. (Round to three decimal places.)
What would be the value of depreciation if Gross domestic capital formation is $33000 and net domestic capital formation is $29,000
ATCF5 = $ ATCF = $ %3D ATCF7 = $ %3D ATCF8 = $ %3D ATCF9 = $ %3D ATCF10 = $ ATCF11 = $ ATCF12 = $ b. Determine the PW of the after-tax cash flows. PWST = $ c. Determine the AW of the after-tax cash flows. AWST = $ d. Determine the FW of the after-tax cash flows. FWST = $ e. Determine the combined IRR of the after-tax cash flows. IRR = %3D f. Determine the combined ERR of the after-tax cash flows. ERR. = %3D g. Determine the real IRR of the after-tax cash flows. IRR, = h. Determine the real ERR of the after-tax cash flows. ERR, =
What is the expected after-tax cash flow from selling a piece of equipment if TwoPlus purchases the equipment today for $162,000.00, the tax rate is 20.10 percent, the equipment is sold in 4 years for $36,600.00, and MACRS depreciation is used where the depreciation rates in years 1, 2, 3, 4, and 5 are 20%, 32%, 19%, 12%, and 10%, respectively? ос $27,026.46 (plus or minus $10) $34,778.94 (plus or minus $10) $57,897.96 (plus or minus $10) $31,522.74 (plus or minus $10) None of the above is within $10 of the correct answer
Consider the following data for 2019 from an after tax cash flow analysis. What is the after tax cash flow for 2019? Before-Tax-and-Loan Cash Flow = $24000 Loan Principal Payment = $3139 Loan Interest Payment = $4280 Depreciation Deduction = $11530 Taxable Income = $6798 Taxes Due = $1586 O $14995 O $9783 O $19275 O $20861
Hello, please explain how to solve EVA in year 3. Thank you Effective income tax rate After-tax MARR EOY BTCF Depreciation, $ (95,000.00) $ $ ¹37,000.00 23,750.00 $ $ 237,000.00 23,750.00 $ 3, $ 37,000.00 23,750.00 $ $ 437,000.00 23,750.00 0, 50% 12% Taxable Income 'Income Taxes ATCF $ (95,000.00) $ 13,250.00 $ 13,250.00 -$6,625.00 -$6,625.00 $ 13,250.00 $ -$6,625.00, 13,250.00 3 -$6,625.00 $ 30,375.00 $ 30,375.00 $ 30,375.00 $ 30,375.00 C For the given table, find the EVA in year 3 (please round the result to integer, e.g., if the result is $ 5,732.07, fill in 5732); Should this project be invested based on the annual/present/future equivalent EVA (fill in "1" if the answer is "yes", otherwise fill in "0")?
4. A firm purchased $120,000 worth of light general- purpose trucks. The operations of the trucks lead to annual income of $50,000 for years 1~4. These trucks were then sold for $20,000 at the end of year 4. Assume a 36% combined tax rate. With a 40% bonus depreciation plus MACRS depreciation, do the following. a) Calculate the before-tax IRR. (b) Calculate the after-tax IRR.
In 2015, a firm has receipts of $8 million and expenses (excluding depreciation) of $4 million. Its depreciation for 2015 amounts to $2 million. If the effective income tax rate is 40%, what is this firm’s net operating income after taxes (NOPAT)?

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