Cycle 3 Tables - General instructions 1 You may use a programmable calculator(scientific or financial type are all right but NO NOTES 2 If you

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Unformatted text preview: General instructions: 1. You may use a programmable calculator (scientific or financial type are all right), but NO NOTES. 2. If you think a problem is incompletely stated, make a typical assumption and continue working. 3. Show intermediate work and answers (if applicable) so that partial credit may be given. 4. Show intermediate work and answers (if applicable). 5. Show by example how you obtain each important item, e.g.: ItemC = ItemA – (ItemB)(0.2) or 1 + 2 – 3 = 4 if the rows or columns are numbered ItemF = max(ItemD, ItemE) 6. Put answers in places shown. If there is no place shown, circle or underline final answers. 7. You may round to the nearest dollar for intermediate and final answers. For percentages, rates, and factors use an accuracy of four significant digits or more. 8. Here are some formulas and various interest tables. There are some notes on depreciation and taxes, a MACRS % table, and federal tax table. S hort name F/P F = P(1 + i ) F/A Short name N A [(1 + i )N - 1 ] F= Interest factor formula P/F Interest factor formula P = F(1 + i )-N A/F Fi A= (1 + i )N - 1 i P/A A [(1 + i )N - 1 ] P= A/P P [i (1 + i )N ] A= i (1 + i )N F/G F= (1 + i )N - 1 G [(1 + i )N -i N - 1] P/G P= G [(1 + i )N -i N - 1] i 2 (1 + i )N i2 A/G A= G [(1 + i )N -i N - 1] i annual = P/g,i P= (1 + i monthly )12 - 1 i (1 + i )N - i F/g,i F= A 1 [(1 + i )N - (1 + g)N ] A 1 [1 - (1 + g)N (1 + i ) i -g i -g The tables below do not contain factors for P/F, A/F, A/P, that are inverses of F/P, F/A, P/A. i = 15% i = 20% N 1 2 3 4 5 F/P 1.1500 1.3225 1.5209 1.7490 2.0114 F/A 1.0000 2.1500 3.4725 4.9934 6.7424 P/A 0.8696 1.6257 2.2832 2.8550 3.3522 A/G 0 .46512 .90713 1.32626 1.72281 P/G 0 .75614 2.0712 3.7864 5.7751 N 1 2 3 4 5 F/P 1.2000 1.4400 1.7280 2.0736 2.4883 F/A 1.0000 2.2000 3.6400 5.3680 7.4416 P/A 0.8333 1.5278 2.1065 2.5887 2.9906 A/G 0 .45455 .87912 1.27422 1.64051 P/G 0 .69444 1.8519 3.2986 4.9061 6 7 8 9 10 2.3131 2.6600 3.0590 3.5179 4.0456 8.7537 11.067 13.727 16.786 20.304 3.7845 4.1604 4.4873 4.7716 5.0188 2.09719 2.44985 2.78133 3.09223 3.38320 7.9368 10.192 12.481 14.755 16.979 6 7 8 9 10 2.9860 3.5832 4.2998 5.1598 6.1917 9.9299 12.916 16.499 20.799 25.959 3.3255 3.6046 3.8372 4.0310 4.1925 1.97883 2.29016 2.57562 2.83642 3.07386 6.5806 8.2551 9.8831 11.434 12.887 11 12 13 14 15 4.6524 5.3503 6.1528 7.0757 8.1371 24.349 29.002 34.352 40.505 47.580 5.2337 5.4206 5.5831 5.7245 5.8474 3.65494 3.90820 4.14376 4.36241 4.56496 19.129 21.185 23.135 24.972 26.693 11 12 13 14 15 7.4301 8.9161 10.6993 12.8392 15.4070 32.150 39.581 48.497 59.196 72.035 4.3271 4.4392 4.5327 4.6106 4.6755 3.28929 3.48410 3.65970 3.81749 3.95884 14.233 15.467 16.588 17.601 18.509 ISyE3025_Exam3_NotesTables 2008.03.06 -N ISyE 3025, These notes and tables will be made available to students as part of Exam 3. 1. The depreciation method. There are 5 methods covered in this course: a. SL, for pre-1981 purchases, you must reflect the estimated salvage value in computation. Annual deprecation expense = (Purchase cost - estim. salvage value)/N. b. SYD, for pre-1981 purchases, you must reflect the estimated salvage value in computation. Obtain the sum of the digits {1 + 2 + ... + N}. Create fractions: N/sum, (N-1)/sum, ... , 2/sum, 1/sum. Apply these fractions to (Purchase cost - estim. salvage value). c. DB family for pre-1981 purchases, ignore the estimated salvage value in computation, but don’t allow the book value to get below it. Must know multiplier, usually 1.5 or 2.0 In contrast to SL and SYD, the DB method is applied iteratively to previous book value. Obtain rate = (multiplier)(100%/N). D1 = (Purchase cost)(rate), BV1 = Purchase cost - D1 , D2 = BV1(rate), BV2 = BV1 - D2 , D3 = BV2(rate), BV3 = BV2 - D3 , etc. d. MACRS % method, for post-1986 purchases, ignore the estimated salvage value in computation. This method is essentially a table look-up method. Generally preferred to option e. e. MACRS alternate SL method, for post-1986 purchases, ignore estimated salvage value in computation. This method is easy to apply. It is required for some types of assets. 2. Full or partial year convention for depreciation. a, b, c. Generally full-year for SL, SYD, and DB for pre-1981 purchases. d. MACRS % method has half-year built in. e. MACRS alt. SL method: you must compute half for first and last years. Other: We don’t cover mid-quarter convention in this course. 3. Premature sale of asset? a, b, c. Don’t change the depreciation expense in year of sale for SL, SYD, and DB for pre-1981 purchases. d, e. For both MACRS methods one should take only half the normal depreciation expense in year of sale. (Sale in last year of depreciation schedule is not considered premature.) Annual depreciation percentages under MACRS specified percentages method (with half-year convention) Recovery Recovery period or property class Year 3-year 5-year 7-year 10-year 1 33.33 20.00 14.29 10.00 2 44.45 32.00 24.49 18.00 3 14.81 19.20 17.49 14.40 4 7.41 11.52 12.49 11.52 5 11.52 8.93 9.22 6 5.76 8.92 7.37 7 8.93 6.55 8 4.46 6.55 9 6.56 10 6.55 11 3.28 12 13 14 15 16 Corporate income taxes for U.S. corporations. Range lower Range upper Range limit, $ limit, $ 50 000 Tax rate, % 15 15-year 5.00 9.50 8.55 7.70 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 Tax computation, X is taxable income 1 0 0+ 0.15(X) 2 50 001 75 000 25 7 500 + 0.25(X - 50 000) 3 75 001 100 000 34 13 750 + 0.34(X - 75 000) 4 100 001 335 000 34 + 5 22 250 + 0.39(X – 100 000) 0.34(X – 335 000) 0.34(X) 5 335 001 10 000 000 34 113 900 + OR 6 10 000 001 15 000 000 35 3 400 000 + 0.35(X - 10 000 000) 7 15 000 001 18 333 333 35 + 3 5 150 000 + 0.38(X - 15 000 000) 35 6 416 666 + OR 0.35(X -18 333 333) 0.35(X) 8 18 333 334 ISyE3025_Exam3_NotesTables no limit 2008.03.06 ...
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This note was uploaded on 09/22/2009 for the course ISYE 3025 taught by Professor Lee during the Fall '09 term at Georgia Institute of Technology.

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