Description of this paper

Simon Machine Tools Company is considering purchasing

Description

solution


Question

Simon Machine Tools Company is considering purchasing a new set of machine tools.;Without the project, the company expects taxable income of $350,000 each year over next 3 yrs;With 3-yr project, purchase of tools at $50,000 is required. Equipment is MACRS class 3. Tools will be sold for $10,000 at end of project life. Project will bring additional revenue of $80,000 and incur additional operating costs of $20,000.;What are the additional taxable incomes from undertaking the project during each of yrs 1 through 3?;What are the additional income taxes during each of yrs 1 through 3?;Compute the gain taxes when the asset is disposed of at end of yr 3.

 

Paper#22947 | Written in 18-Jul-2015

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