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Cost Segregation Benefits for Manufacturing Plants PDF Print E-mail

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A $3 million manufacturing plants generates a lot of revenue each year, and even after factoring different costs and upkeep, there are still sizeable amounts of taxable income to be had. After completing a Cost Segregation Study the manufacturing plant can save $32,637 over the traditional straight-line deduction, and $106,900 from year one to six. Should the business reach its depreciable life, a Cost Segregation Study can save the manufacturer $107,532.

Cash Flow Increased in year 1 $ 32,637
Cash Flow Increased in year 1-6 $ 160,900
Net Present Value (NPV) $ 142,525
Combined Tax Rate   41%
Net Present Value Factor   8%

Asset Class Percent
Reclassed
  Depreciable
Basis
5 - Year Property 5%   150,000
7 - Year Property 10%   300,000
15 - Year Property 12%   360,000
39 - Year Property 73.0%   2,190,000
Total Real Property  $ 3,000,000
 
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