Depreciation, Investment Appraisal
Not what you're looking for?
This two problems MUST be done in excel format. Please include explanation
1. Office equipment whose initial cost is $100,000 has an estimate actual life of 6 years , with an estimated salvage value of $10,000. Prepare tables listing the annual cost of depreciation and the book value at the end of each 6 years , based on the straight line , sum of years digits and MACRS depreciation.
2. A corporation with $7 million in annual taxable income is considering two alternatives:
Year Alternative1 Alternative2
0 -$10,000 -$20,000
1-10 $4500 $4500
11-20 $0 $4500
Both alternatives will be depreciated by straigh -line depreciation assuming a 10 year depreciable life and no salvage value.Neither alternative is to be replaced at the end of its useful life. If the corporation has a minimum atractive rate of retun of 10% after taxes , which alternative should i choose? Solve the problem by:
Present Worth Analysis
Annual Cash Flow Analysis
Rate of Retun Analyis
Future Worth Analyis
Benefit-Cost ratio analyis
Purchase this Solution
Solution Summary
Answers to two questions:
1) Depreciation calculation using straight line , sum of years digits and MACRS ;
2) Investment Appraisal using Present Worth Analysis, Annual Cash Flow Analysism Rate of Retun Analyis, Future Worth Analyis, Benefit-Cost ratio analyis.
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.