A9-1 - A9-13.a.Ship AShip BCost of new...

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Unformatted text preview: A9-13.a.Ship AShip BCost of new ship$40,000,000$54,000,000Installation8,000,0006,000,000Total installed cost$48,000,000$60,000,000Less proceeds from selling existing ship$18,000,000Less tax on sale of existing ship:Sale price$18,000,000– Book value(1 -.20-.32-.192) ×$32,000,0009,216,000Gain on sale of existing ship$ 8,784,000×Tax rate.40Tax on sale of existing ship3,513,60After-tax proceeds from sale of existing ship(14,486,400)(14,486,400)+ Initial working capital investment4,000,0006,000,000INITIAL CASH OUTFLOW$37,513,600$51,513,600b and c.Ship A:5-Year MACRS %Installed CostDepreciation20$48,000,000$ 9,600,000 32$48,000,00015,360,000 19.2$48,000,0009,216,000 11.52$48,000,0005,529,600 11.52$48,000,0005,529,600 5.76$48,000,0002,764,800 Total$48,000,000Year:12345Sales – Expenses (PBDT)$21,000,000$21,000,000$21,000,000$21,000,000$21,000,000– Depreciation9,600,00015,360,0009,216,0005,529,6005,529,600Taxable income$11,400,000$ 5,640,000$11,784,000$15,470,400$15,470,400– Taxes (40%)4,560,0002,256,000...
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This note was uploaded on 04/14/2008 for the course FIN 3123 taught by Professor Qayyum during the Spring '08 term at Mississippi State.

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A9-1 - A9-13.a.Ship AShip BCost of new...

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