The firm is in the 30% income tax bracket and uses double-declining-balance (DDB) depreciation with no salvage value. Given a four-year life, the DDB depreciation rate is 50% (i.e., 2 x 25% ). In year four, record depreciation expense as the net book value (NBV) of the asset at the start of the year. (Round discount factor to 3 decimal places and other answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign.) Year 0 1 2 3 4 Pre-Tax Cash Inflows $ (60,000) 32,000✔ 32,000 32,000 32,000 Depreciation Taxable Expense Income S S 0 30,000 2,000 15,000✔ 17,000✔ 7,500✔ 24,500 7,500✔ 24,500 Income Taxes 0$ 0 600✔ 5,100 7,350 7,350 After-tax Net Cash Inflow S (60,000) ✔ 31,400 26,900 24,650 24,650 Net present value (NPV) = Discount Factor 0.000 S 0.909 X 0.826 X 0.751 X 0.683 S Present Values (60,000) (60,000) Show less
The firm is in the 30% income tax bracket and uses double-declining-balance (DDB) depreciation with no salvage value. Given a four-year life, the DDB depreciation rate is 50% (i.e., 2 x 25% ). In year four, record depreciation expense as the net book value (NBV) of the asset at the start of the year. (Round discount factor to 3 decimal places and other answers to the nearest whole dollar amount. Negative amounts should be indicated by a minus sign.) Year 0 1 2 3 4 Pre-Tax Cash Inflows $ (60,000) 32,000✔ 32,000 32,000 32,000 Depreciation Taxable Expense Income S S 0 30,000 2,000 15,000✔ 17,000✔ 7,500✔ 24,500 7,500✔ 24,500 Income Taxes 0$ 0 600✔ 5,100 7,350 7,350 After-tax Net Cash Inflow S (60,000) ✔ 31,400 26,900 24,650 24,650 Net present value (NPV) = Discount Factor 0.000 S 0.909 X 0.826 X 0.751 X 0.683 S Present Values (60,000) (60,000) Show less
Chapter11: Long-term Assets
Section: Chapter Questions
Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...
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I need help with the discount factor. The numbers for 10% on the chart do not work as you can see in the picture. Thank you.
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