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Homework 7 2010 Solution

# Homework 7 2010 Solution - Your solutions to Problems 1-3...

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Max Scored Problem #1 200 Problem #2 200 Problem #3 200 Problem #4 200 Problem #5 200 Total 1000 0 Save File as Last Name.First Initial.Homework 7.xls example: Phillips.R.Homework7.xls Your solutions to Problems 1-3 should be identical to mine, or you get Zero. Prob you treated tax. In the "Option" worksheets I show that - when EBIT is negative yo The other acceptable option is what most of you did, which is to calculate 35% tax flow in the years of loss, and gives a higher IRR. This option is also representative negative EBIT at one facility can be consolidated with positive EBIT at another fac

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Corrected 0 blems 4 and 5 have have optional solutions, depending on how ou pay no tax (i.e. After Tax Income = Before Tax Income). x on the negative EBIT. This option reduces the negative cash e of what Enterprises with multiple facilities do, because cility and reduce the overall tax burden for the corporation.
200 Depreciation Schedule Year New Fixed Cap Asset Value 1990 \$25,000,000 \$10,713,750 \$14,286,250 1991 \$2,908,237 \$8,898,825 \$4,723,162 1992 \$2,972,007 \$7,630,115 \$4,240,717 1993 \$838,749 \$5,810,063 \$2,658,801 1994 \$4,414,328 \$6,041,347 \$4,183,044 1995 \$1,947,844 \$4,831,758 \$3,157,433 1996 \$2,557,357 \$3,872,130 \$3,516,985 1997 \$4,466,224 \$4,169,613 \$4,168,740 1998 \$3,941,805 \$4,534,639 \$3,576,779 1999 \$3,700,008 \$4,699,749 \$3,534,898 2000 \$1,129,091 \$3,690,065 \$2,138,775 2001 \$526,077 \$2,708,641 \$1,507,501 2002 \$2,956,445 \$3,048,585 \$2,616,501 2003 \$3,711,475 \$3,563,148 \$3,196,912 2004 \$773,705 \$2,657,822 \$1,679,031 2005 \$3,797,524 \$3,354,357 \$3,100,988 2006 \$4,467,584 \$4,216,099 \$3,605,842 2007 \$4,782,831 \$4,992,072 \$4,006,859 Sum of Investments \$74,891,291 Annual Depreciation Following is a history of Capital Investment at the Alaska depreciation schedule but account for a new government 50% in 1990 plus normal MACRS Depreciaton over the ne Annual Depreciation for this plant. Complete the Checks and show the details of the depreciation calculation in th New Fixed Capital Accumulated Depreciation

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Cumulative Depreciation Check 1 Total of All Capital Investments in 2007 should equal 2007 Asset Value
57.15% 12.25% 8.75% 6.25% 4.47% 1990 1991 1992 1993 1994 \$25,000,000 \$2,908,237 \$2,972,007 \$838,749 \$4,414,328 Space provided for the Depreciation Calculations 1990 1991 1992 1993 1994 \$14,286,250 \$3,061,250 \$2,186,250 \$1,561,250 \$1,116,250 \$1,661,912 \$356,114 \$254,325 \$181,619 \$1,698,353 \$363,922 \$259,902 \$479,303 \$102,705 \$2,522,568 \$14,286,250 \$4,723,162 \$4,240,717 \$2,658,801 \$4,183,044 a Pulp and Paper Company. Use the MACRS

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Homework 7 2010 Solution - Your solutions to Problems 1-3...

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