Capital gains tax rate 0.15 Income tax rate 0.30 1. Straight line depreciation A firm is...
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Capital gains tax rate 0.15 Income tax rate 0.30 1. Straight line depreciation A firm is considering purchasing a new asset. Use the information in the chart below to find the net cash outlay for this asset. 0 Cost of New Asset 125,000 Installation Costs 0 Old Asset Book Value 0 Proceeds on Sale 32,000 Initial Purchase Price 100,000 Decrease in Working Capital 7,000 2 Capital gains tax rate 0.15 0.30 3 Income tax rate 4 5 PROBLEM 1 6 Inputs 7 Cost of New Asset 125,000.00 8 Installation Costs 0.00 9 Old Asset 10 Book Value 0.00 11 Proceeds on Sale 32,000.00 12 Initial Purchase Price 100,000.00 13 Decrease in Working Capital 7,000.00 14 15 Outputs Distribution Tax Effects 16 Book Value 0.00 17 Capital Gain 18 Capital Loss 19 Recaptured Depreciation 20 Proceeds on Sale 21 22 Cost of New Asset 23 Installation Costs 24 Proceeds on Sale, Old Asset 25 Taxes on Proceeds on Sale 26 Decrease in Working Capital 27 Net Cash Outlay Capital gains tax rate 0.15 Income tax rate 0.30 1. Straight line depreciation A firm is considering purchasing a new asset. Use the information in the chart below to find the net cash outlay for this asset. 0 Cost of New Asset 125,000 Installation Costs 0 Old Asset Book Value 0 Proceeds on Sale 32,000 Initial Purchase Price 100,000 Decrease in Working Capital 7,000 2 Capital gains tax rate 0.15 0.30 3 Income tax rate 4 5 PROBLEM 1 6 Inputs 7 Cost of New Asset 125,000.00 8 Installation Costs 0.00 9 Old Asset 10 Book Value 0.00 11 Proceeds on Sale 32,000.00 12 Initial Purchase Price 100,000.00 13 Decrease in Working Capital 7,000.00 14 15 Outputs Distribution Tax Effects 16 Book Value 0.00 17 Capital Gain 18 Capital Loss 19 Recaptured Depreciation 20 Proceeds on Sale 21 22 Cost of New Asset 23 Installation Costs 24 Proceeds on Sale, Old Asset 25 Taxes on Proceeds on Sale 26 Decrease in Working Capital 27 Net Cash Outlay
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