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Economics

Simon Machine Tools Company is considering purchasing a new set of machine tools. Without the project, the company expects taxable income of $350,000 each year over next 3 yrs With 3-yr project, purchase of tools at $50,000 is required. Equipment is MACRS class 3. Tools will be sold for $10,000 at end of project life. Project will bring additional revenue of $80,000 and incur additional operating costs of $20,000.

What are the additional taxable incomes from undertaking the project during each of yrs 1 through 3?

What are the additional income taxes during each of yrs 1 through 3?

Compute the gain taxes when the asset is disposed of at end of yr 3.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M967451

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