A facilities engineer is considering a $50,000 investment in an energy management system (EMS). The system is expected to save $10,000 annually in utility bills for N years. After N years, the EMS will have a zero salvage value. In an after-tax analysis, how many years would N need to be in order for the engineer's company to earn a 10% return on the investment? Assume MACRS depreciation with a three-year class life and a 35% tax rate.
A facilities engineer is considering a $50,000 investment in an energy management system (EMS). The system is expected to save $10,000 annually in utility bills for N years. After N years, the EMS will have a zero salvage value. In an after-tax analysis, how many years would N need to be in order for the engineer's company to earn a 10% return on the investment? Assume MACRS depreciation with a three-year class life and a 35% tax rate.
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 10PA: The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $60,000,...
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A facilities engineer is considering a $50,000 investment in an energy management system (EMS). The system is expected to save $10,000 annually in utility bills for N years. After N years, the EMS will have a zero salvage value. In an after-tax analysis, how many years would N need to be in order for the engineer's company to earn a 10% return on the investment? Assume MACRS
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