QUESTION 43 ABC Paper Co purchased several machines at a pur

QUESTION 43 ABC Paper Co. purchased several machines at a purchase price of $300,000. The installation cost for this equipment was $25,000. The firm plans to depreciate the equipment MACRS S year normal recovery period. Prepare a depreciation schedule showing the depreciation T TIT Paragraph \' Anal \' :(12pt, \'-. E. T. ,\' e QUESTION 44 Given the Sinancial dala for Semith Elechic, inc, computo the lollowing mesures of cash fows for Smith Electnic for the year ended Decemtr 31, 2005 The lax rate is 26 6 aOperaling Cash Flow (2 points b) Free Cash Flow4 points) For the yoar ended Decomber 31, 2005 2001 2005 Deprocationi EBT 53 000 30 000 ,000 Cick Save and Subor to sane and ubmit Click Save All Anuers to saue all anver Save Al Ausm Type here to search

Solution

The base value of the asset = $ 300,000

Year	Depreciation rate	Depreciation expense
1	20%	$60,000.00
2	32%	$96,000.00
3	19.20%	$57,600.00
4	11.52%	$34,560.00
5	11.52%	$34,560.00
6	5.76%	$17,280.00