US Air Lines is now in the terminal year of a project. The equipment originally
ID: 2806678 • Letter: U
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US Air Lines is now in the terminal year of a project. The equipment originally costs $10o.0 percent has been depreciated. The US Air can sell the used equipment salva evah irline for $2.0 million. The tax rate is 35 pereent. What is the after-tax net million, of which 90 today to another salvage value? (5pts) A. $2.0 million B $0.65 million C $1.65 million D. $1.35 million Q#15 The balance sheet data for SBG Associates are as follows (in million $) Liabilities and Shareholders' Equity Debt Assets S250 500 $750 Assets $750 Equity (6 million shares) $750 The shareholders now require a 20 percent return on their capital. The bonds are now yielding 14 percent (yield-to-maturity). The corporate tax rate is 35%. 15(0) What is SBG's after-tax cost of debt? (5pts) (A) 14% (B) 20% 9% 10% 11% Show your work below (C) (D) (E)Explanation / Answer
Q14 c 1.65 million As per chegg guidelines we answer one question per post. Kindly post remaining questions in next post Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Paticulars Amount Original cost 10,000,000.00 Less Accumulated depreciation (9,000,000.00) Carrying amount 1,000,000.00 Sale Value 2,000,000.00 Gain on sale = 2m -1m 1,000,000.00 Tax on gain =1m*.35 (350,000.00) After Tax salvage value =2m - 350,000 1,650,000.00
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