Equipment was purchased for $100,000 plus $1,000 in freight…

Equipment was purchased for $100,000 plus $1,000 in freight charges. Installation costs were $500 and sales tax totaled $7,500. Hiring a special consultant to provide advice during the selection of the equipment cost $1,000. What is this asset’s depreciable basis?

Your firm needs a machine which costs $20,000 and requires $…

Your firm needs a machine which costs $20,000 and requires $1,000 in maintenance for each year of its three-year life. After three years, this machine will be replaced. The machine falls into the MACRS three-year class life category. Assume a tax rate of 21 percent and a discount rate of 9 percent. What is the depreciation tax shield for this project in year 3?

Colleen and Genevieve are twins who are celebrating their 40…

Colleen and Genevieve are twins who are celebrating their 40th birthdays today (t = 0).  Neither has saved anything for retirement.  Colleen realizes that she needs to begin saving for retirement, and her plan is to deposit into an investment account $16,000 annually at the end of each of the next 25 years.  The first deposit will occur one year from now when she turns 41 (t = 1), and the final deposit will be made on her 65th birthday (t = 25).  On the other hand, Genevieve is a procrastinator and doesn’t plan on beginning saving for retirement until she turns 50.  She will also make her last deposit on her 65th birthday, so she will have made only 15 annual deposits.  Both Colleen and Genevieve plan to retire when they make their final deposits on their 65th birthdays.  Both have similar investing styles so they both expect to earn an annual 7% rate of return on their investments.  How much does Genevieve need to save annually to have the same amount at retirement that Colleen has?