1)Assume your federal income tax rate (FITR) is 28% and state income tax rate (SJTR.) is 8%. Calculate your after-tax cash flow for a year where your before-tax gross income (BTGI) from a project is $5,000, your expenses (E) are $1,800, and depreciation (0) is $1,200.
2)Consider the tax depreciation for a $1,000 investment using both the modified accelerated recovery system (MACRS) are the straight-line depreciation accounting systems, Show that the MACRS system is more beneficial economically. Use a 5-year tax life. The corporate MARR is 10%, and the tax rate is 34.