Explore BrainMass

Explore BrainMass

    Depreciation, Investment Appraisal

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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

    © BrainMass Inc. brainmass.com December 24, 2021, 5:15 pm ad1c9bdddf

    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.