Respuesta :
Answer:
$25,550
Explanation:
For computing the net investment first we have to find out the loss or gain on sale of old equipment which is shown below:
Sale value = $61,200
Less: Book value of old equipment = $60,200
Gain = $1000
Now
Tax on gain is
= $1,000 × 25%
= $250
So, the net gain is
= $1,000 - $250
= $750
Now the net investment is
= Cost of new equipment - sale value pre tax + net gain
= $86,000 - $61,200 + $750
= $25,550
Answer:
Net Investment = $25,550
Explanation:
Given:
Sale value (old equipment) = $61,200
Book value of old equipment = $60,200
New equipment cost = $86,000
Effective tax rate = 25%
Computation
Gain on sale = $61,200 - $60,200
Gain on sale = $1,000
Amount of tax on gain = $1000 × 25%
Amount of tax on gain = $250
Net Gain = Gain on sale - Amount of tax on gain
Net Gain = $750
Net Investment = Cost of new equipment - (Sale value - Net Gain)
Net Investment = $86,200 - (61,200 - 750)
Net Investment = $25,550
