Question Details

(Solved) (Latest ver. Aug 2020) - How will the IRS's decision affect the after- tax cost

Brief item decscription

Item details:


Ms. T. Potts, the treasurer of Ideal China, has a problem. The company has just ordered a new kiln for $ 400,000. Of this sum, $ 50,000 is described by the supplier as an installation cost. Ms. Potts does not know whether the Internal Revenue Service ( IRS) will permit the company to treat this cost as a tax- deductible current expense or as a capital investment. In the latter case, the company could depreciate the $ 50,000 using the five- year MACRS tax depreciation schedule. How will the IRS's decision affect the after- tax cost of the kiln? The tax rate is 35% and the opportunity cost of capital is 5%.


About this question:

This question was answered on: Sep 16, 2020

PRICE: $11.5

Solution~00010416.zip (18.37 KB)

Buy this answer for only: $11.5

Pay using PayPal (No PayPal account Required) or your credit card. All your purchases are securely protected by PayPal.

Need a similar solution fast, written anew from scratch? Place your own custom order

We have top-notch tutors who can help you with your essay at a reasonable cost and then you can simply use that essay as a template to build your own arguments. This we believe is a better way of understanding a problem and makes use of the efficiency of time of the student. New solution orders are original solutions and precise to your writing instruction requirements. Place a New Order using the button below.

Order Now