Question :
145.Sticky Sam buys a piece of equipment for $61,400 that : 1302836
145.Sticky Sam buys a piece of equipment for $61,400 that has a useful life of 4 years. The equipment will generate operating cash flows of $18,550 per year and will have no salvage value at the end of its life. The income tax rate is 30%. Straight-line depreciation is used. How much is the internal rate of return?
A.3.3%
B.8.0%
C.30.2%
D.5.68%
146.Sticky Sam buys a piece of equipment for $61,400 that has a useful life of 4 years. The equipment will generate operating cash flows of $18,550 per year and will have no salvage value at the end of its life. The income tax rate is 30%. Straight-line depreciation is used. How much is the depreciation tax shield?
A.$10,745
B.$15,350
C.$4,605
D.$5,565
147.Sticky Sam buys a piece of equipment for $61,400 that has a useful life of 4 years. The equipment will generate operating cash flows of $18,550 per year and will have no salvage value at the end of its life. The income tax rate is 30%. Straight-line depreciation is used. What is the payback period?
A.3.3 years
B.4.7 years
C.1.21 years
D.None of these answer choices are correct.
148.Chiller Time wants to purchase a new ice cream truck which costs $56,000. The company has a cost of capital of 8%, required rate of return of 10%, and the prevailing income tax rate is 30%. The acquisition is proposed for January 1, 2014. Chiller Time expects it can sell the truck for $8,000 at end of its useful life of 4 years. Chiller Time predicts the new truck will generate net income of $5,000 and operating cash flows of $17,000 during 2014, with an increase of 5% each subsequent year. What is the accounting rate of return?
A.22.4%
B.16.8%
C.44.9%
D.17.7%
149.Wilson Productions bought a piece of equipment for $53,400 that will last for 5 years. The equipment will generate annual net operating cash inflows of $13,600 and will have a $1,000 salvage value at the end of its life. Straight-line depreciation is used. The income tax rate is 30%. What is the net present value using a 7% required rate of return?
A$2,362
B.$3,076
C.$3,362
D.None of these answer choices are correct.
150.Wonton Productions bought a piece of equipment for $55,898 that will last for 5 years. The equipment will generate net operating cash flows of $14,000 per year and will have no salvage value at the end of its life. Straight-line depreciation is used. The income tax rate is 30%. What is the internal rate of return?
A.3.99%
B.8.00%
C.25.05%
D.32%
151.Wonton Productions bought a piece of equipment for $55,898 that will last for 5 years. The equipment will generate net operating cash flows of $14,000 per year and will have no salvage value at the end of its life. Straight-line depreciation is used. The income tax rate is 30%. How much is net income or (loss) in year 2?
A.$17,354
B.$25,180
C.$2,820
D.$10,646
152.Ranger Enterprises bought a piece of equipment for $64,000 that will last for 5 years. The equipment will generate net operating cash flows of $14,000 per year and will have a $3,000 salvage value at the end of its life. Straight-line depreciation is used. The income tax rate is 30%. How long is the payback period?
A.4.6 years
B.6.5 years
C.3.8 years
D.None of these answer choices are correct.
153.Ranger Enterprises bought a piece of equipment for $64,000 that will last for 5 years. The equipment will generate net operating cash flows of $14,000 per year and will have a $3,000 salvage value at the end of its life. Straight-line depreciation is used. The income tax rate is 30%. What is the amount to be used in denominator in determining the accounting rate of return?
A.$12,200
B.$64,000
C.$13,400
D.$33,500
