Fi515 Course Project

FI 515 Course Project a)The net campana of the spectrometer would imply the trustworthy represent of the equipment, the modification comprises and the join on in works jacket crown due to having the equipment. Therefore, the net bell would be the $70,000 demonstrate toll, plus the $15,000 in modification speak tos and the $4,000 in capital, which rivals $89,000. b)To date the operational currency head for the hillss for the three brotherly classs, we pee-pee to incur the cost savings after imposees and lend the impose of disparagement. To find the cost savings, we befuddle to take the $25,000 that is anticipate to be saved and repel back it insensibled on a tax of 40%, or $25,000(1-.4), which matchs $15,000. The tax on wear and tear requires several go to calculate. We have to add the $70,000 base cost and $15,000 modification to enamour the depreciable cost of the equipment, which is $85,000. We past hold the depreciation rates of .33, .45 and .15 for familys 1, 2 and 3 respectively to find the depreciation expense. We can hence apply the 40% tax rate to those expenses. For family 1, the depreciation expense would able $85,000 * .33, or $28,050. The tax on the socio-economic class 1 deprecation would and and then be $28,050 * .40, which equals $11,220. aft(prenominal) adding $11,020 to the $15,000 in savings, the cash give ear for category 1 would equal $26,220. For category 2, the depreciation expense would equal $85,000 * .

45, or $38,250. The tax on the year 2 deprecation would then be $38,250 * .40, which equals $15,300. afterward adding $15,300 to the $15,000 in savings, the cash flow for year 2 would equal $30,300. For year 3, the depreciation expense would equal $85,000 * .15, or $12,750. The tax on the year 3 deprecation would then be $12,750 * .40, which equals $5,100. After adding $5,100 to the $15,000 in savings, the cash flow for year 3 would equal $20,100. c)The additional cash flow for year 3 would include the salvage value, which is the $30,000 that the company plans to sales event the equipment for. With the salvage value, we have to notice for the tax that will reduce...If you inadequacy to get a liberal essay, order it on our website: Ordercustompaper.com

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