Q: Depreciation recapture occurs when a depreciable asset is sold for:
Depreciation recapture occurs when a depreciable asset is sold for: (a) More than the current book value (b) More than the current market value (c) More than the estimated salvage value (d) More than...
See AnswerQ: A capital gain is calculated by the equation: (a
A capital gain is calculated by the equation: (a) Capital gain = book value – selling price (b) Capital gain = book value – first cost (c) Capital gain = market value – selling price (d) Capital gain...
See AnswerQ: Pennington Oil is in the 50% effective tax bracket. It
Pennington Oil is in the 50% effective tax bracket. It had gross income of $470 million in each of the last 2 years. In the first year, deductions were $160 million. In the second year, deductions wer...
See AnswerQ: A small manufacturing company with a gross income of $360,
A small manufacturing company with a gross income of $360,000 has the following operating expenses: M&O = $76,000, insurance = $7000, labor = $110,000, utilities = $29,000, debt service = $37,000, and...
See AnswerQ: An after-market auto parts company sells a machining robot that
An after-market auto parts company sells a machining robot that had been depreciated to zero for $16,000. If the company’s effective tax rate is 36%, the sale will: (a) Increase the company’s taxes by...
See AnswerQ: A contractor who files as unmarried (single) to the IRS
A contractor who files as unmarried (single) to the IRS has an effective tax rate of 28%. His gross income is $155,000, other income is $4000, personal expenses are $45,000, and deductions and exempti...
See AnswerQ: The after-tax analysis for a $60,000 investment
The after-tax analysis for a $60,000 investment with associated gross income minus expenses (GI – OE) is shown below for the first 2 years only. If the effective tax rate is 40%, the...
See AnswerQ: An asset purchased for $100,000 with S = $
An asset purchased for $100,000 with S = $20,000 after 5 years was depreciated using the 5-year MACRS rates. Expenses averaged $18,000 per year and the effective tax rate is 30%. The asset was actuall...
See AnswerQ: In what alternative evaluation is it considered important that an anticipated capital
In what alternative evaluation is it considered important that an anticipated capital loss (CL) on an in-place asset should be included in an after-tax analysis? Why?
See AnswerQ: If alternative 1A served 100% of the households instead of 95
If alternative 1A served 100% of the households instead of 95%, by how much would the monthly household cost decrease?
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