{"id":31260,"date":"2018-02-20T23:50:30","date_gmt":"2018-02-20T23:50:30","guid":{"rendered":"https:\/\/writemyessayfree.com\/accounting-help"},"modified":"2017-08-16T05:59:57","modified_gmt":"2017-08-16T05:59:57","slug":"accounting-help","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/accounting-help\/","title":{"rendered":"Accounting Help"},"content":{"rendered":"<div class=\"the_content_wrapper\">\n<p>Sullivan Company plans to acquire a new asset that costs $400,000 and is anticipated to have a salvage value of $30,000 at the end of four years. Sullivan\u2019s policy is to depreciate all assets with the use of straight-line depreciation with no half-year convention. The new asset will replace an old asset that currently has a tax basis of $80,000 and can be sold for $60,000 now. Sullivan will continue to earn the same revenues of $200,000 per year that it earned with the old asset. However, savings in operating costs will be $120,000 in each of the first three years and $90,000 in the fourth year. Sullivan is subject to a 40 percent tax rate and has an after-tax cost of capital of 10 percent.<\/p>\n<p>A. What is the present value of the depreciation tax shield for the new asset for Year 1? Round your answer to the nearest whole number.<\/p>\n<p>B. What is the investment\u2019s net present value (after tax)? Round your answer to the nearest whole number.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Sullivan Company plans to acquire a new asset that costs $400,000 and is anticipated to have a salvage value of $30,000 at the end of four years. Sullivan\u2019s policy is to depreciate all assets with the use of straight-line depreciation <a href=\"https:\/\/www.benedictsol.com\/blogs\/accounting-help\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-31260","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/31260","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=31260"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/31260\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=31260"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=31260"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=31260"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}