Complete the table below for each cash flow estimate. Use Straight Line Deprecia

Question

Complete the table below for each cash flow estimate. Use Straight Line Depreciation And a Tax Rate of 40% Pace Corporation has a taxable income of $3,000,000 in 2015. What would be the tax rate and amount of the tax Pace corporation must pay for 2015? Complete the table below for each cash flow estimate. Use Double Declining Balance Depreciation And a Tax Rate of 38%. Complete the table below for each cash flow estimate. Show all work to complete the determination of the Mean Value IRR using linear interpolation on the back of this sheet. Place your answer in the location identified.

Explanation / Answer

Year Option A depreciation benefit tax benefit on dep Total benefit After tax benefit 0 -1000 -1000 -1000 1                      67                    220                            26.67              246.67                      148.00 2                      67                    220                            26.67              246.67                      148.00 3                      67                    220                            26.67              246.67                      148.00 4                      67                    220                            26.67              246.67                      148.00 5                      67                    220                            26.67              246.67                      148.00 6                      67                    220                            26.67              246.67                      148.00 7                      67                    220                            26.67              246.67                      148.00 8                      67                    220                            26.67              246.67                      148.00 9                      67                    220                            26.67              246.67                      148.00 10                      67                    220                            26.67              246.67                      148.00 11                      67                    220                            26.67              246.67                      148.00 12                      67                    220                            26.67              246.67                      148.00 IRR 23% 10% Year Option B depreciation benefit tax benefit on dep Total benefit After tax benefit 0 -1100 -1100 -1100 1 100 210                            40.00              250.00                      150.00 2 100 210                            40.00              250.00                      150.00 3 100 210                            40.00              250.00                      150.00 4 100 210                            40.00              250.00                      150.00 5 100 210                            40.00              250.00                      150.00 6 100 210                            40.00              250.00                      150.00 7 100 210                            40.00              250.00                      150.00 8 100 210                            40.00              250.00                      150.00 9 100 210                            40.00              250.00                      150.00 10 100 210                            40.00              250.00                      150.00 IRR 19% 6% Year Option C depreciation benefit tax benefit on dep Total benefit After tax benefit 0 -1200 -1200 -1200 1 150 200                            60.00              260.00                      156.00 2 150 200                            60.00              260.00                      156.00 3 150 200                            60.00              260.00                      156.00 4 150 200                            60.00              260.00                      156.00 5 150 200                            60.00              260.00                      156.00 6 150 200                            60.00              260.00                      156.00 7 150 200                            60.00              260.00                      156.00 8 150 200                            60.00              260.00                      156.00 IRR 14% 1%

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