1 answer

I tried to answer 996,-996,292,-292,3201,-3201, all these were incorrect. Freedom Corporation acquired a fixed asset for...

Question:

Freedom Corporation acquired a fixed asset for $220,000. Its estimated life at time of purchase was 4 years, with no estimateTABLE 2 Present Value of Annuity of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 1 0.962 0.952 0.943 0.93TABLE 1 Present Value of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 1 0.962 0.952 0.943 0.935 0.926 0.9Required 1 Required 2 Required 3 What is the incremental present value of the tax benefits resulting from calculating depreci

i tried to answer 996,-996,292,-292,3201,-3201, all these were incorrect.

Freedom Corporation acquired a fixed asset for $220,000. Its estimated life at time of purchase was 4 years, with no estimated salvage value. Assume a discount rate of 7% and an income tax rate of 40%. (Use Exhibit 12.4, Appendix C, TABLE 1 and Appendix C, TABLE 2.)
TABLE 2 Present Value of Annuity of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.533 0.800 0.769 2 1.556 1.559 1.833 1.508 1.783 1.759 1.736 1.713 1.690 1.665 1.647 1.626 1.528 1.440 1.361 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 2.361 2.322 2.283 2.106 1.952 1.816 4 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 2.974 2.914 2.855 2.539 2.362 2.166 4.452 4.329 4.212 4.100 3.993 3.390 3.791 3.696 3.605 3.517 3.433 3.352 2.991 2.689 2.436 6 5.242 5.076 4.917 4.767 4.623 4.456 4.355 4.231 4.111 3.999 3.589 3.784 3.326 2.951 2.643 7 6.002 5.756 5.582 5.389 5.206 5.033 4.568 4.712 4.564 4.423 4.288 4.160 3.605 3.161 2.502 S 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 4.799 4.639 4.487 3.537 3.329 2.925 9 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 5.132 4.946 4.772 4.031 3.463 3.019 10 3.111 7.722 7.360 7.024 6.710 6.418 6.145 5.859 5.650 5.426 5.216 5.019 4.192 3.571 3.092 118.760 .306 7.887 7.499 7.139 6.505 6.495 6.207 5.939 5.687 5.453 5.234 4.327 3.656 3.147 12 9.355 S.563 3.354 7.943 7.536 7.161 6.514 6.492 6.194 5.915 5.660 5.421 4.439 3.725 3.190 13 9.986 9.394 5.353 .358 7.904 7.487 7.103 6.750 6.424 6.122 5.342 5.553 4.533 3.780 3.223 14 10.563 9.599 9.295 3.745 8.244 7.756 7.367 6.982 6.628 6.302 6.002 5.724 4.611 3.824 3.249 15 11.118 10.350 9.712 9.108 3.559 8.061 7.606 7.191 6.511 6.462 6.142 5.847 4.675 3.859 3.268 16 11.652 10.538 10.106 9.447 8.551 8.313 7.524 7.379 6.974 6.604 6.265 5.954 4.730 3.857 3.283 17 12.166 11.274 10.477 9.763 9.122 S.544 3.022 7.549 7.120 6.729 6.373 6.047 4.775 3.910 3.295 18 12.659 11.690 10.328 10.059 9.372 3.756 3.201 7.702 7.250 6.540 6.467 6.128 4.812 3.928 3.304 1913.134 12.035 11.158 10.336 9.604 S.950 .365 7.839 7.366 6.938 6.550 6.198 4.543 3.942 3.311 13.590 12.462 11.470 10.594 9.818 9.129 3.514 7.963 7.469 7.025 6.623 6.259 4.570 3.954 3.316 22 14.451 13.163 12.042 11.061 10.201 9.442 9.772 S.176 7.645 7.170 6.743 6.359 4.909 3.970 3.323 24 15.247 13.799 12.550 11.469 10.529 9.707 .985 .348 7.784 7.283 6.535 6.434 4.937 3.981 3.327 25 15.622 14.094 12.783 11.654 10.675 9.3239.077 3.422 7.543 7.330 6.573 6.464 4.945 3.955 3.329 30 17.292 15.372 13.765 12.409 11.258 10.274 9.427 5.694 .055 7.496 7.003 6.566 4.979 3.995 3.332 35 15.665 16.374 14.498 12.948 11.655 10.567 9.644 S.555 .176 7.556 7.070 6.617 4.992 3.999 3.333 40 19.793 17.159 15.046 13.332 11.925 10.757 9.779 5.951 8.244 7.634 7.105 6.642 4.997 3.999 3.333
TABLE 1 Present Value of $1 Periods 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 20% 25% 30% 1 0.962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 0.585 0.877 0.870 0.333 0.500 0.769 2 0.925 0.907 0.590 0.873 0.857 0.842 0.826 0.812 0.797 0.783 0.769 0.756 0.694 0.640 0.592 3 0.589 0.364 0.540 0.816 0.794 0.772 0.751 0.731 0.712 0.693 0.675 0.655 0.579 0.512 0.455 4 0.555 0.823 0.792 0.763 0.735 0.70 0.683 0.659 0.636 0.613 0.592 0.572 0.452 0.410 0.350 5 0.522 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0.497 0.402 0.328 0.269 6 0.790 0.746 0.705 0.666 0.630 0.596 0.564 0.535 0.507 0.480 0.456 0.432 0.335 0.262 0.207 7 0.760 0.711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.279 0.210 0.159 S 0.731 0.677 0.627 0.582 0.540 0.502 0.467 0.434 0.404 0.376 0.351 0.327 0.233 0.165 0.123 9 0.703 0.645 0.592 0.544 0.500 0.460 0.424 0.391 0.361 0.333 0.308 0.284 0.194 0.134 0.094 10 0.676 0.614 0.558 0.505 0.463 0.422 0.356 0.352 0.322 0.295 0.270 0.247 0.162 0.107 0.073 11 0.650 0.585 0.527 0.475 0.429 0.385 0.350 0.317 0.287 0.261 0.237 0.215 0.135 0.036 0.056 12 0.625 0.557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 0.231 0.208 0.187 0.112 0.069 0.043 13 0.601 0.530 0.469 0.415 0.368 0.326 0.290 0.25% 0.229 0.204 0.152 0.163 0.093 0.055 0.033 14 0.577 0.505 0.442 0.385 0.340 0.299 0.263 0.232 0.205 0.181 0.160 0.141 0.078 0.044 0.025 15 0.555 0.481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 0.160 0.140 0.123 0.065 0.035 0.020 16 0.534 0.45 0.394 0.339 0.292 0.252 0.218 0.18 0.163 0.141 0.123 0.107 0.054 0.025 0.015 17 0.513 0.436 0.371 0.317 0.270 0.231 0.198 0.170 0.146 0.125 0.108 0.093 0.045 0.023 0.012 18 0.494 0.416 0.350 0.296 0.250 0.212 0.150 0.153 0.130 0.111 0.095 0.081 0.035 0.018 0.009 190.475 0.396 0.331 0.277 0.232 0.194 0.164 0.138 0.116 0.098 0.053 0.070 0.031 0.014 0.007 20 0.456 0.377 0.312 0.25% 0.215 0.178 0.149 0.124 0.104 0.087 0.073 0.061 0.026 0.012 0.005 22 0.422 0.342 0.278 0.226 0.154 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.018 0.007 0.003 24 0.390 0.310 0.247 0.197 0.158 0.126 0.102 0.082 0.066 0.053 0.043 0.035 0.013 0.005 0.002 25 0.375 0.295 0.233 0.184 0.146 0.116 0.092 0.074 0.059 0.047 0.035 0.030 0.010 0.004 0.001 30 0.308 0.231 0.174 0.131 0.099 0.075 0.057 0.044 0.033 0.026 0.020 0.015 0.004 0.001 0.000 35 0.253 0.181 0.130 0.094 0.068 0.049 0.036 0.026 0.019 0.014 0.010 0.008 0.002 0.000 0.000 40 0.205 0.142 0.097 0.067 0.046 0.032 0.022 0.015 0.011 0.005 0.005 0.004 0.001 0.000 0.000
Required 1 Required 2 Required 3 What is the incremental present value of the tax benefits resulting from calculating depreciation using the double-declining- balance (DDB) method rather than the straight-line (SLN) method on this asset? Use the SLN and DDB functions in Excel to calculate depreciation charges. (Negative amount should be indicated by a minus sign. Round your answer to the nearest whole dollar.) Show less Incremental PV of tax savings using DDB depreciation $ 996

Answers

Solution:

The Present Value of Incremental Tax Benefits is $ 3,777.

2,20,000 Cost of Acquisition Estimated Salvage Value Discount Rate Income Tax Rate 40% Depreciation using Year SLN DDB Increm

.

Similar Solved Questions

1 answer
In the circuit shown below, the power dissipated in Riis in R2 and 4 times that...
In the circuit shown below, the power dissipated in Riis in R2 and 4 times that dissipated in R3. Determine the valus Vif 13=2 A. ow, the power dissipated in R1 is twice that dissipated i dissipated in R3. Determine the value of R1, R2,R3 and Vi=12V 12 713=24 R2S RS 5 Find the maximum value of sourc...
1 answer
1. Use the binomial theorem to show i) Ek_0 () = 21; ii) _o(-1)* (m.) =...
1. Use the binomial theorem to show i) Ek_0 () = 21; ii) _o(-1)* (m.) = 0; and finally that the sum of the ( over odd k equals that over the even k and that both are 21-1. (Hint: for iii) add and subtract the results of i) and ii). For i) and ii) put x and y equal to suitable values in the binomial ...
1 answer
Question 2: Hindi Builders Inc. produces three products: A, B, and C. The following information is...
Question 2: Hindi Builders Inc. produces three products: A, B, and C. The following information is presented for the three products: Fixed Cost Units produced Price Per Unit Variable Cost Per Unit Product A 80 $ 320 $ 160 Products 120 $ 1,800 $ 800 Productc 200 $ 2,800 $ 1,500 Required: 1. Calculate...
1 answer
Question 19 4 pts Suppose a random variable x is best described by a normal distribution...
Question 19 4 pts Suppose a random variable x is best described by a normal distribution with = 60 and sigma=16. Find the z-score that corresponds to the value x = 0. O-16 0 -3.75 16 O 3.75 Previous Next...
1 answer
Important of ethics in accounting?
Important of ethics in accounting?...
1 answer
For the sn1 mechanism for the following nucleophilic substitution: select the transition state structure that is...
for the sn1 mechanism for the following nucleophilic substitution: select the transition state structure that is not involved in any steps of the mechanism QUESTION 10 10) For the Sp1 mechanism for following nucleophilic substitution: select the transition state (TS structure that is NOT involved...
1 answer
PLEASE SHOW EXPLANATION, WORK, AND EQUATIONS 7. Given the following information, determine the beta coefficient for...
PLEASE SHOW EXPLANATION, WORK, AND EQUATIONS 7. Given the following information, determine the beta coefficient for Stock G that is consistent with equilibrium: expected return for Stock G = 9.5%; risk-free rate of return = 3.5%; required return for the market = 9%. 8. Consider the following inform...
1 answer
Kevin earned $33.00 in 3 hours. How long will it take him to earn $121.00?
Kevin earned $33.00 in 3 hours. How long will it take him to earn $121.00?...
1 answer
Moving to another Question 4 Rank the following compounds from MOST to LEAST acidic. 2 3...
Moving to another Question 4 Rank the following compounds from MOST to LEAST acidic. 2 3 1 4>2 >3 > 1 2>1>4 > 3 2 > 4> 1 > 3 04> 3 > 2>1...
1 answer
Last month when Holiday Creations, Inc., sold 35,000 units, total sales were $286,000, total variable expenses...
Last month when Holiday Creations, Inc., sold 35,000 units, total sales were $286,000, total variable expenses were $203,060, and fixed expenses were $36,300. Required: 1. What is the company’s contribution margin (CM) ratio? 2. What is the estimated change in the company’s net operating...
1 answer
PLEASE ANSWER ALL OF THE QUESTIONS Question 1 5 pts An object is placed 7 cm...
PLEASE ANSWER ALL OF THE QUESTIONS Question 1 5 pts An object is placed 7 cm to the left of a converging lens with a focal length of 12 cm. What is the magnification of the final image with respect to the object? If the image is real, the magnification is negative. Please include the minus sign in ...
1 answer
HW Saved Help Save & E Che Required information (The following information applies to the questions...
HW Saved Help Save & E Che Required information (The following information applies to the questions displayed below.) At the beginning of Year 2, Oak Consulting had the following normal balances in its accounts: Account Cash Accounts receivable Accounts payable Common stock Retained earnings Bal...
1 answer
What are some challenges involved in assessing learners in specialized populations, such as bilingual learners,
What are some challenges involved in assessing learners in specialized populations, such as bilingual learners,...
1 answer
How many electron groups does a central atom have that has two double bonds? 02
How many electron groups does a central atom have that has two double bonds? 02...
1 answer
What is the oxidation number for lead in #PbCl_2#?
What is the oxidation number for lead in #PbCl_2#?...
1 answer
Montgomery Company has developed the following flexible budget formulas for its four overhead items: Fixed Cost...
Montgomery Company has developed the following flexible budget formulas for its four overhead items: Fixed Cost $10,000 $ 1,500 Overhead item Maintenance Power Indirect labor cost Equipment lease Total Variable rate per direct labor hour $ 3.00 $ 0.30 $12.00 $_7,000 $18,500 $15.30 Montgomery normall...