Saturday
November 1, 2014

Homework Help: Finance, Economics

Posted by Katy Marshall on Thursday, May 12, 2011 at 10:05pm.

A small vessel (this means 10 year life) was purchased by a chemical company for $55,000 and is to be depreciated by MACRS depreciation. When its requirements changed suddenly, the chemical company leased the vessel to an oil company for 6 years at $10,000 per year. The lease also provided that the vessel could be purchased at the end of 6 years by the oil company for $35,000. At the end of the 6 years, the oil company exercised its option and bought the vessel. The chemical company has a 34% incremental tax rate. Compute its after-tax rate of return on the vessel. (Answer: 9.86%)

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

college finance - 37. Morage Corp. is replacing an entire baking line that was ...
Math - A delivery truck is purchased for $38,000 has a salvage value of $6,000 ...
business math - A delivery truck is purchased for $38,000, has a salvage value ...
accounting - 1-On May 1, 2012, Pinkley Company sells office furniture for $150,...
microeconomics - Sam Johnson started a small machine shop, Machines, Inc., in ...
financial accounting - eckman company purchased equipment for $80,000 on ...
accounting - A company purchased a machine on January 1 of the current year for...
finance - Your company is considering a replacement of an old delivery van with ...
Finance - Your company is considering a replacement of an old delivery van with ...
Finance - A company has just completed the third year of a five-year MACRS ...

Search
Members