XYZ is evaluating a project that would require a purchase of a piece of equipment for...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
XYZ is evaluating a project that would require a purchase of a piece of equipment for $100,000 today. During the year 1, the project is expected to have a relevant revenue of 142,000, relevant costs of 93,000 and relevant depreciation of 23,000. XYZ would need to borrow $100,000 today to pay for the equipment and would need to make an interest payment of $2000 to the bank in 1 year. relevant net income for the project in year 1 is expected to be 15,000 what is the tax rate supposed to be in year 1? XYZ is evaluating a project that would require a purchase of a piece of equipment for $100,000 today. During the year 1, the project is expected to have a relevant revenue of 142,000, relevant costs of 93,000 and relevant depreciation of 23,000. XYZ would need to borrow $100,000 today to pay for the equipment and would need to make an interest payment of $2000 to the bank in 1 year. relevant net income for the project in year 1 is expected to be 15,000 what is the tax rate supposed to be in year 1?
Expert Answer:
Answer rating: 100% (QA)
To calculate the tax rate for year 1 we first need to determine the ... View the full answer
Related Book For
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
Posted Date:
Students also viewed these finance questions
-
The difference of squares of two numbers is 180. The square of the smaller number is 8 times the larger number. Find the two numbers.
-
Sandys Fan Gear makes two different products sold to local sports clubs: baseball caps and lanyards. Products come in several different colours. Overhead costs are currently allocated based on direct...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
7. Arrange the following nitrogen containing compounds in decreasing order of basicity NH NH -H (P) (a) S>R>Q> P NO (R) (2) (b) P>Q>S>R -H (S) (c) P>Q>R>S (d) R>Q> P > S
-
Calculating Annuity Values Dinero Bank offers you a $30,000, seven-year term loan at 8 percent annual interest. What will your annual loan payment be?
-
Describe a scenario of an application of accessibility of permission code for a course in a university. a. Draw a class diagram of the application. b. Document a detailed and significant use case. c....
-
Due to a nationwide recession, Amesbury Systems merchandise inventory is gathering dust. It is now October 31,2010, and the \($163,300\) that Amesbury Systems paid for its ending inventory is...
-
The QC department at Hershey Mechanical wants to estimate the average useful life of the new O-ring seals that the company has just put on the market. A simple random sample of 25 O-rings produces a...
-
2C distributes laptops to retail stores and extends credit terms 3/15, n/60 to all its customers. During the month of June 2021, the following merchandising transactions occurred: June 12: Purchased...
-
Assume it is Monday, May 1, 2020, the first business day of the month, and you have just been hired as the accountant for Alpine Company, which operates with monthly accounting periods. All of the...
-
Sharon's Delights Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available: Standard Amount...
-
https://www.youtube.com/watch?v=2g88Ju6nkcg Question: How does the "saying" and the "said" influence this conversation? What is the role of organization to foster diversity and inclusion? What is the...
-
White Corporation's budget calls for the following sales for next year: Quarter 1 Quarter 2 105,500 units 88,000 units Quarter 3 Quarter 4 71,900 units 103,600 units Each unit of the product requires...
-
CONCEPT VOCABULARY AND WORD STUDY from Mrs. Dalloway Virginia Woolf WORD LIST solemnity leaden dejected A. DIRECTIONS: In each of the following items, think about the meaning of the italicized word...
-
Poetry Collection 3: Concept Vocabulary Worksheet Apostrophe to the Ocean | The World Is Too Much With Us and London, 1802 George Gordon, Lord Byron | William Wordsworth WORD LIST torrid sordid...
-
How do distributed operating systems address the challenges of network communication, process coordination, and fault tolerance to enable transparent access to resources across heterogeneous...
-
Criminal justice organizations must be able to grow and change to improve and meet the needs of a changing society. Effective organizational management can help facilitate the change process....
-
In the simple quantity theory of money, what will lead to an increase in aggregate demand? In monetarism, what will lead to an increase in aggregate demand?
-
The following is data for two bonds at a time when the market yield is 7 percent. These bonds are otherwise identical (FV = $1,000, five years to maturity, semi-annual coupon payments). Which bonds...
-
Amanda would like to borrow $50,000 to pay one years tuition at a private U.S. university. She would like to make quarterly payments and finish repaying the loan in five years. If the bank is quoting...
-
In 2012, a firms revenue is $90,000, cost of sales is $40,000, rent is $10,000, depreciation is $2,000, and interest paid is $2,000. Its tax rate is 35 percent. a. Construct an income statement based...
-
Which of the following is a characteristic of a corporation? a. Mutual agency b. No income tax c. Limited liability of shareholders d. Both a and b
-
Team Spirit Inc. issues 240,000 common shares for \$ \(\$ 5\) per share. The journal entry is: a. Cash..... 240,000 Common Shares. 240,000 b. Cash...... 1,200,000 Common Shares. 240,000 Gain on the...
-
The board of directors of Laptops Plus authorizes the issue of \(\$ 9,000,000\) of \(7 \%\), 15 -year bonds payable. The semiannual interest dates are May 31 and November 30. The bonds are issued on...
Study smarter with the SolutionInn App