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Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | May 2017 |
| Last Sign in: | 398 Weeks Ago, 6 Days Ago |
| Questions Answered: | 66690 |
| Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
7-78. Acme Manufacturing makes their preliminary economic studies using a before-tax MARR of 18%. More detailed studies are performed on an after-tax basis. If their effective tax rate is 40%, the after-tax MARR is
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(a) 6%Â Â Â Â Â Â Â Â (b) 7%Â Â Â Â Â Â Â Â (c) 11%Â Â Â Â Â Â Â Â (d) 13%
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7-79. Suppose for some year the income of a small company is $110,000; the expenses are $65,000; the depreciation is $25,000; and the effective income tax rate = 40%. For this year, the ATCF is most nearly
|
(a) −$8,900 |
(b) $4,700 |
(c) $13,200 |
|
(d) $29,700 |
(e) $37,000 |
 |
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Your company is contemplating the purchase of a large stamping machine. The machine will cost $180,000. With additional transportation and installation costs of $5,000 and $10,000, respectively, the cost basis for depreciation purposes is $195,000. Its MV at the end of five years is estimated as $40,000. The IRS has assured you that this machine will fall under a three-year MACRS class life category. The justifications for this machine include $40,000 savings per year in labor and $30,000 savings per year in reduced materials. The before-tax MARR is 20% per year, and the effective income tax rate is 40%. Use this information to solve problems 7-80 through 7-83.
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