A machine was purchased two years ago for $120,000 and can be sold for $50,000 today. The machine has been depreciated using the MACRS 5-year recovery period and the firm pays 40 percent taxes on both ordinary income and capital gains
(a) Compute recaptured depreciation and capital gain (loss), if any.
(b) Find the firm's tax liability.
(a) Book Value = $120,000 (1 - 0.20 - 0.32 ) = $57,600
Recaptured depreciation = $0
Capital loss = $57,600 - $50,000 = $7,600
(b) Tax benefit = $7,600 × 0.40 = $3,040
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Which of the following industries would you expect to have, on average, high asset turnover and low profit margin?
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What will happen to the breakeven point (in units) if Mosaic can reduce fixed costs by $22,000? (Round your answer up to the nearest whole unit.)
Mosaic Tile Company has estimated the following amounts for its next fiscal year:
A) The breakeven point will decrease by 917 units.
B) The breakeven point will decrease by 1100 units.
C) The breakeven point will increase by 1100 units.
D) The breakeven point will increase by 500 units.
South Dakota, like other states, may regulate private activities to protect or promote the public order, health, safety, and general welfare under
a. the state's police powers. b. the dormant commerce clause. c. the due process clause. d. the free exercise clause.