Tex Corporation trades in a class 10 (30%) asset during the current year. The opening UCC balance in the class 10 pool is $420,000. Tex trades in an asset for $25,000, which he sets off the $125,000 he pays for a new class 10 asset. The tax marginal rate is 35%. The nominal after-tax rate of return is 10%.
a. Calculate the UCC balance at the end of the year.
b. Calculate the tax shield on the trade in.
c. Calculate the NPV cash outflow on the trade in.

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The Answer of Tex Corporation trades in a class 10 (30%) asset during the current year. The opening UCC balance in the class 10 pool is $420,000. Tex trades in an asset for $25,000, which he sets off the $125,000 he pays for a new class 10 asset. The tax marginal rate is 35%. The nominal after-tax rate of return is 10%.
a. Calculate the UCC balance at the end of the year.
b. Calculate the tax shield on the trade in.
c. Calculate the NPV cash outflow on the trade in.

Tex Corporation Trades in a Class 10 (30%) Asset During