The following information relating to an investment in equipment has been extracted from the books of...

Transcribed Image Text:

The following information relating to an investment in equipment has been extracted from the books of CB Ltd The total purchase price is $61.176: salvage value is $820 at the end of year 3. net sales revenue (relating to the equipment): Year-1 $34,000: Year-2 $28.000 and Year-3 $23.000: applicable tax rate is 32%; and the required rate of return is 1196. Required: If the depreciation rate is 25% straight line, calculate the tax amount in the third year relating to the sale of the equipment only. The following information relating to an investment in equipment has been extracted from the books of CB Ltd The total purchase price is $61.176: salvage value is $820 at the end of year 3. net sales revenue (relating to the equipment): Year-1 $34,000: Year-2 $28.000 and Year-3 $23.000: applicable tax rate is 32%; and the required rate of return is 1196. Required: If the depreciation rate is 25% straight line, calculate the tax amount in the third year relating to the sale of the equipment only.

Answer rating: 100% (QA)

To calculate the tax amount in the third year relating to the sale of the equipment we first need to ... View the full answer