First cost of equipment = $6,000 Salvage value after 5 years = $1,500 MACRS depreciation is used as a 5-year property. Income-tax rate for the company = 34% Capital gains are taxed at 15% rate. Year BTCF, $ 0 -6,000 (Initial cost) 1 1,600 2 1,600 3 1,600 4 1,600
5 1,600 6 1,600 9,000 ( Market value) Reference: Ref 12-2 The tax on depreciation recapture in year 6 is equal to __________________.
A. $3,060
B. $6,000
C. $2,040
D. $9,000
First cost of equipment = $6,000 Salvage value after 5 years = $1,500 MACRS depreciation is used as a 5-year property. Income-tax rate for the company = 34% Capital gains are taxed at 15% rate. Year BTCF, $ 0 -6,000 (Initial cost) 1 1,600 2 1,600 3 1,600 4 1,600
5 1,600 6 1,600 9,000 ( Market value) Reference: Ref 12-2 The tax on depreciation recapture in year 6 is equal to __________________.
A. $3,060
B. $6,000
C. $2,040
D. $9,000
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First cost of equipment = $200,000
Market value at the end of year 6 = $10,000
MACRS depreciation is used. The equipment is 5-year property.
Incremental income-tax rate for the company = 35%
Year |
0 |
1 |
2 |
3 |
4 |
5 |
6 |
BT-CF in $ |
-200K |
60K |
63K |
66K |
69K |
72K |
75K Market value = 10K |
The first-year after tax-cash flow is equal to _____________.