APSC 221 Chapter 7 Question and answers rated A+ 2024/2025
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Course
APSC 221
Institution
APSC 221
APSC 221 Chapter 7 Question and answers rated A+ 2024/2025 APSC 221 Chapter 7-11
Taxes are a disbursement - correct answer disbursement- money spent
T/F income taxes reduce the benefits of a successful project - correct answer True
T/F income taxes reduces the costs of an unsuccessfu...
APSC 221 Chapter 7-11
Taxes are a disbursement - correct answer ✔disbursement- money spent
T/F income taxes reduce the benefits of a successful project - correct answer
✔True
T/F income taxes reduces the costs of an unsuccessful project - correct
answer ✔True
In a loss-generating project, the net savings in tax can be viewed as what -
correct answer ✔a negative disbursement (receipt?)
tax credits - correct answer ✔real or nominal costs that are not taxed or
taxed at a reduced rate
capital assets - correct answer ✔purchases of assets of significant value
For tax calculations: First cost - correct answer ✔multiply by CTF and
convert to PW
For tax calculations: savings/expenditures - correct answer ✔multiply by (1-t)
and convert to PW
For tax calculations: salvage value - correct answer ✔multiply by CSF and
convert to PW
, Which is higher before-tax MARR or after-tax MARR? - correct answer
✔before-tax MARR must be high enough to account for impact of taxes when
they have to be paid
if money is saved, savings increase profits, increasing taxes - correct answer
✔True
T/F salvage/scrap value is income and therefore is taxed - correct answer
✔True
Solving for after-tax IRR - correct answer ✔Set PW of receipts and
disbursements to zero and solve for unknown interest rate i*
underpreciated capital cost (UCC) - correct answer ✔basis for calculating the
CCA for assets in a particular asset class
Capital cost of asset - correct answer ✔total cost of acquiring the asset,
includes purchase price, installation, transportation, legal and administrative
costs
UCC is the remaining book value for the assets subject to depreciation -
correct answer ✔may differ from market or salvage value
Half year rule means - correct answer ✔only 1/2 of the capital cost of
acquiring an asset is considered in the year of purchase, other half is included
in the next year
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