A large wine maker would like to buy new stainless steel containers for aging its wine....

 

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A large wine maker would like to buy new stainless steel containers for aging its wine. It is planning to purchase a number of containers for a total of $280,000. They have 7 years of usable life and lose the same value each year. The wine maker will then sell them in 4 years for an estimated $90,000 to replace with brand new ones at that time. The wine maker falls into a 33% tax rate bracket. Calculate the after-tax salvage value at the time the containers will get sold. First, what is the annual depreciation of the containers? [Select] . Second, what is the remaining book value of the steel containers at the time when they will be sold by the wine maker? [Select] Finally, what is the after-tax salvage value of the steel containers? [Select] . This implies that this is a [Select] for the wine maker. A large wine maker would like to buy new stainless steel containers for aging its wine. It is planning to purchase a number of containers for a total of $280,000. They have 7 years of usable life and lose the same value each year. The wine maker will then sell them in 4 years for an estimated $90,000 to replace with brand new ones at that time. The wine maker falls into a 33% tax rate bracket. Calculate the after-tax salvage value at the time the containers will get sold. First, what is the annual depreciation of the containers? [Select] . Second, what is the remaining book value of the steel containers at the time when they will be sold by the wine maker? [Select] Finally, what is the after-tax salvage value of the steel containers? [Select] . This implies that this is a [Select] for the wine maker.

Answer rating: 100% (QA)

This scenario describes a depreciation calculation for the stainless steel containers owned by the w... View the full answer