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Southwest Airlines just bought a new jet for $26,000,000. The jet falls into the 7-year...

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Accounting

Southwest Airlines just bought a new jet for $26,000,000. The jet falls into the 7-year MACRS category, with the following depreciation rates (half-year convention):

Year 1 2 3 4 5 6 7 8
Depr. rate 14.29% 24.49% 17.49% 12.49% 8.93% 8.92% 8.93% 4.46%

The jet can be sold for $20,800,000 after 5 years. The company has a marginal tax rate of 34%.

Attempt 1/10 for 9 pts.

Part 1

What is the book value at the end of year 5?

Submit

Attempt 1/10 for 9 pts.

Part 2

What is the after-tax cash flow at the end of year 5?

Submit

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