Answer True or False for the following: a. For MACRS depreciation, salvage value

Question

Answer True or False for the following: a. For MACRS depreciation, salvage value varies b. Capital expenditures are considered taxable C. For straight income line depreciation, a constant depreciation charge is made. d. In most cases we want to maximize the depreciation charges taken in the first and second years. e. Taxable Income = Gross Income-Expenses- Depreciation charges Fill in the Blanks for the following questions: f. After Tax Cash Flow = Before Tax Cash Flow- g. For MACRS Depreciation automobiles and trucks are consid Property h. A company that had a taxable income of $977,000 would pay taxes at the rate of: Depreciation requires a production or utilization schedule

Explanation / Answer

(a) False.

(b) True

(c) True

(d) False

(e) True

(f) Income tax expense

(g) Five year property.

(h) $338,980 ($113,900 + 34% of amount over 335,000 = $113,900 + 34% of (997,000- 335,000) = $338,980.)

(i) Unts of production

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