A company purchases 'special tools for the manufacture of plastic parts' for $60,000. Year 1 Year 2
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Question:
A company purchases 'special tools for the manufacture of plastic parts' for $60,000.
| Year 1 | Year 2 | Year 3 | |
|---|---|---|---|
| Gross income from sales | $200,000 | $200,000 | $200,000 |
| Purchase of special tools for plastic mfg. | $60,000 | ||
| Other expenditures | $140,000 | $140,000 | $140,000 |
a. Determine the MACRS depreciation for the asset.
b. Complete the following chart:
| Year | Pre-tax cash flow | Depreciation % | Depreciation amount |
|---|---|---|---|
| 0 | |||
c. create the cash flow diagram
d. Calculate the pre-tax ROR
Expert Answer:
To determine the MACRS depreciation for the asset we need to know the assets classification and recovery period The MACRS Modified Accelerated Cost Re... View the full answer
Related Book For 
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
Posted Date:
