A real estate photographer would like to invest in a drone camera so that she can take better aerial footage of properties. The drone will cost $1,400 and be used for the next 2 years before she needs to upgrade to a more recent model. She estimates that the drone will generate additional photography revenue of $1.000 per year, and that her drone will have a salvage value of $300 at the end of the 2nd year. Assuming a tax rate of 22%, a MACRS 5-year property class, 100% bonus depreciation, and an after-tax MARR of 9%. compute the after-tax present worth of the drone and determine whether or not the photographer should invest in this drone. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-vear residential rental property. Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 15. Should the photographer invest in the drone?
A real estate photographer would like to invest in a drone camera so that she can take better aerial footage of properties. The drone will cost $1,400 and be used for the next 2 years before she needs to upgrade to a more recent model. She estimates that the drone will generate additional photography revenue of $1.000 per year, and that her drone will have a salvage value of $300 at the end of the 2nd year. Assuming a tax rate of 22%, a MACRS 5-year property class, 100% bonus depreciation, and an after-tax MARR of 9%. compute the after-tax present worth of the drone and determine whether or not the photographer should invest in this drone. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-vear residential rental property. Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 15. Should the photographer invest in the drone?
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 13P
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Transcribed Image Text:A real estate photographer would like to invest in a drone camera so that she can take better aerial footage of properties. The drone
will cost $1,400 and be used for the next 2 years before she needs to upgrade to a more recent model. She estimates that the drone
will generate additional photography revenue of $1,000 per year, and that her drone will have a salvage value of $300 at the end of the
2nd year. Assuming a tax rate of 22%, a MACRS 5-vear property class, 100% bonus depreciation, and an after-tax MARR of 9%,
compute the after-tax present worth of the drone and determine whether or not the photographer should invest in this drone.
Click here to access the TVM Factor Table calculator.
Click here to access the MACRS-GDS Property Classes.
Click here to access the MACRS-GDS percentages page.
Click here to access the MACRS-GDS percentages for 27.5-year residential rental property.
Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 15.
Should the photographer invest in the drone?
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