FREE Trial

An asset with a first cost of $9000 is depreciated by MACRS over a 5-year recovery period. The CFBT is

Question:

An asset with a first cost of $9000 is depreciated by MACRS over a 5-year recovery period. The CFBT is estimated at $10,000 for the first 4 years and $5000 thereafter as long as the asset is retained. The effective tax rate is 40%, and money is worth 10% per year. In present worth dollars, how much of the cash flow generated by the asset over its recovery period is lost to taxes?

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!

Step by Step Answer:

Answer rating: 44% (9 reviews)

Find the difference between PW of CFBT and CFAT PWCFBT 10 000 P A 10 4 5000 P A 10 2 P F …View the full answer


answer-question
Answered By
tutor-profile-image
Ashington Waweru
I am a lecturer, research writer and also a qualified financial analyst and accountant. I am qualified and articulate in many disciplines including English, Accounting, Finance, Quantitative spreadsheet analysis, Economics, and Statistics. I am an expert with sixteen years of experience in online industry-related work. I have a master's in business administration and a bachelor’s degree in education, accounting, and economics options. I am a writer and proofreading expert with sixteen years of experience in online writing, proofreading, and text editing. I have vast knowledge and experience in writing techniques and styles such as APA, ASA, MLA, Chicago, Turabian, IEEE, and many others. I am also an online blogger and research writer with sixteen years of writing and proofreading articles and reports. I have written many scripts and articles for blogs, and I also specialize in search engine I have sixteen years of experience in Excel data entry, Excel data analysis, R-studio quantitative analysis, SPSS quantitative analysis, research writing, and proofreading articles and reports. I will deliver the highest quality online and offline Excel, R, SPSS, and other spreadsheet solutions within your operational deadlines. I have also compiled many original Excel quantitative and text spreadsheets which solve client’s problems in my research writing career. I have extensive enterprise resource planning accounting, financial modeling, financial reporting, and company analysis: customer relationship management, enterprise resource planning, financial accounting projects, and corporate finance. I am articulate in psychology, engineering, nursing, counseling, project management, accounting, finance, quantitative spreadsheet analysis, statistical and economic analysis, among many other industry fields and academic disciplines. I work to solve problems and provide accurate and credible solutions and research reports in all industries in the global economy. I have taught and conducted masters and Ph.D. thesis research for specialists in Quantitative finance, Financial Accounting, Actuarial science, Macroeconomics, Microeconomics, Risk Management, Managerial Economics, Engineering Economics, Financial economics, Taxation and many other disciplines including water engineering, psychology, e-commerce, mechanical engineering, leadership and many others. I have developed many courses on online websites like Teachable and Thinkific. I also developed an accounting reporting automation software project for Utafiti sacco located at ILRI Uthiru Kenya when I was working there in year 2001. I am a mature, self-motivated worker who delivers high-quality, on-time reports which solve client’s problems accurately. I have written many academic and professional industry research papers and tutored many clients from college to university undergraduate, master's and Ph.D. students, and corporate professionals. I anticipate your hiring me. I know I will deliver the highest quality work you will find anywhere to award me your project work. Please note that I am looking for a long-term work relationship with you. I look forward to you delivering the best service to you.
3.00+ 2+ Reviews 10+ Question Solved
Related Book For  answer-question
Engineering economy

Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

See More Books
View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Question Posted: December 17, 2012 06:35:29
See More Questions

Students also viewed these Economics questions

Q:
An asset with a first cost of $350,000 three years ago is sold for $385,000. The asset was depreciated by the MACRS method and has a book value of $100,800 at the time of sale. Determine the capital...
A:
DR 350 000......
Q:
An asset with a first cost of $300,000 is depreciated by the MACRS method using a 5-year recovery period. Determine the economic value added in year 2, if the net operating profit after taxes is...
A:
BV 1 300 000 300......
Q:
An assembly line robot arm with a first cost of $75,000 in 2001 had a cost of $89,750 in 2017. If the equipment cost index for robots was 307 in 1995 and the robot cost increased exactly in...
A:
89 750 7......
Q:
The cubic equation x 3 - x + 3 = 0 has roots , , . a. Using the relation S n , = n + n + n , or otherwise, find the value of S 4 . b. By considering S 1 and S 4 , determine the value of 3 ( + ) +...
A:
a The cubic equation x3 x 3 0 can be factored as x......
Q:
Show that, if (1 and (2 satisfy the time-dependent Schrdinger equation, then c1(1 + c2(2 satisfies this equation, where c1 and c2 are constants.
A:
Given ih 1 t H 1 and ih 2 t H 2 Prove......
Q:
In the following, name three items denoted by the terms in the left-hand column and all items denoted by the terms in the right-hand column: Newspaper.......................Tallest mountain on earth...
A:
Newspaper Los Angeles Times Chicago Tribune Washington Post Scientist Enrico Fermi P......
Q:
The rule of inversion states that: A. Only metrics that are difficult to measure should be selected as KPIs. B. Risk KPIs are essential for tracking performance. C. Only core metrics should be...
A:
D Only the e......
Q:
Captain Borders Corp. manufacturers fishing equipment. Currently, the company has a plant in Los Angeles and a plant in New Orleans. William Borders, the firms owner, is deciding where to build a new...
A:
Solve two separate transportation problems One will include Philadelphia and the......
Q:
Using Westlaw NeXT or print resources, find the statute of limitations for a legal malpractice claim in Washington (i.e., suing a lawyer or law firm for malpractice). How much time does a Plaintiff...
A:
According to Westlaw Next the statute of limitations for a legal malpractice claim in Washington is......
Q:
We provide you with the balance sheet of a Spanish company at the end of the year. The company carried out its accounting according to the PGC 2007. You have to analyse each of the items and specify...
A:
Click to View...
Q:
A bioengineer is evaluating methods used to apply adhesive onto microporous paper tape that is commonly used after surgery. The machinery costs $200,000, has no salvage value , and the CFBT estimate...
A:
a MACRS depreciation PW tax 13 300 P F 8 1 4180 P F 8 2 28 500 P F 8 8......
Q:
Last month, a company specializing in wind power plant design and construction made a capital investment of $400,000 in physical simulation equipment that will be used for at least 5 years, after...
A:
a At sale time there will be depreciation recapture of DR 10......
Q:
The greatest seasonal variations in temperature occur in a. the west coasts of the continents b. the east coasts of the continents c. continental interiors d. isolated islands
A:
The area of the continental interior is greater than the coastal areas......
Q:
A Mortgage with a Balloon Payment. You've taken out a 25-year, $75,250 mortgage at 13.8% annual interest. You anticipate that you will own the house for four years and then sell it, repaying the loan...
A:
To calculate the size of the balloon payment we first need to determine the remaining balance on the......
Q:
1. Listening is an active, learned process consisting of four phases:receiving/hearing the message, attending, comprehending, andresponding. True False 2. Hearing is the phase of the listening...
A:
The detailed answer for the above question is provided below 1 True Listening is indeed an active learned process consisting of four phases receiving hearing the message attending comprehending and re......
Q:
Optimal capital structure Cosmetic Manufacturers is contemplating changing the capital structure of the firm. The firm has $45,000,000 in total assets, earnings be- fore interest and taxes of...
A:
To calculate the values in the table we need to find the amount of debt and equity for each level of debt as well as the total number of shares of com......
Q:
Over the last 50 years, I.P.O.'s in the United States have been underpriced by 16.8 percent on average. This translates to more than $125 billion that companies have left on the table in the last 20...
A:
I P O Underpricing Initial Public Offering I P O underpricing refers to the situation where the offering price of a company s shares to the public is......
Q:
Here are some preliminary details and data about Amanda. She needs your help computing and filing her 2021 income taxes (due in mid-2022). She is single with no dependents. She earns a salary of...
A:
Net Income Amanda s net income is her salary minus her CPP and EI contributions 200 000 3 559 CPP 2......
Q:
Costco is willing to work with unionized employees if they vote and win an election to be represented by a union. Assume that you are an employee at a nonunion Costco store and a union organizer has...
A:
Factors that may motivate an employee to sign a union authorization card include concerns about wage......
Q:
For a Poisson process of rate , the Bernoulli arrival approximation assumes that in any very small interval of length , there is either 0 arrivals with probability 1- or 1 arrival with probability ....
A:
In an interval t t with an infinitesimal let A i denote the eve......
Q:
A woman made 10 annual end-of-year purchases of $1000 worth of common stock. The stock paid no dividends. Then for 4 years she held the stock. At the end of the 4 years she sold all the stock for...
A:
FW FW 1000 F A i 10 F P i 4 28 000 By tr......
Q:
For some interest rate i and some number of interest periods n, the uniform series capital recovery factor is 0.1728 and the sinking fund factor is 0.0378. What is the interest rate? Discuss.
A:
Since A P i......
Q:
The following beginning-of-month (BOM) and end of month (EOM) amounts are to be deposited in a savings account that pays interest at 9% compounded monthly: Today (BOM 1) $400 EOM2 270 EOM6 100 EOM7...
A:
i NIR m 9 12 0 75 mo F 12 400 F P 0 75 12 27......
Managers And The Legal Environment Strategies For The 21st Century 2nd Edition - ISBN: 0314043918 - Free Book