A special-purpose machine toolset would cost $30.000. 1l1e entire capitalexpenditure ($30.000) is 10 be borrowed with the stipulation that it be repaid by two equal end-of-year payments at 12% compounded annually. 11rn tool is expected to provide annual savings (in the material) of $45,000 for two years and is to be depreciated by the MACRS Three-year recovery period. This is a special machine tool will require annual O&M costs in the amount of $12,000.111e salvage value at the end of two years is expected 10 be $9,000. Assuming a marginal tax rate of 40% and MARR of 15%. what is the net present worth of this project?
A special-purpose machine toolset would cost $30.000. 1l1e entire capitalexpenditure ($30.000) is 10 be borrowed with the stipulation that it be repaid by two equal end-of-year payments at 12% compounded annually. 11rn tool is expected to provide annual savings (in the material) of $45,000 for two years and is to be depreciated by the MACRS Three-year recovery period. This is a special machine tool will require annual O&M costs in the amount of $12,000.111e salvage value at the end of two years is expected 10 be $9,000. Assuming a marginal tax rate of 40% and MARR of 15%. what is the net present worth of this project?
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 3P
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A special-purpose machine toolset would cost $30.000. 1l1e entire capital
expenditure ($30.000) is 10 be borrowed with the stipulation that it be repaid by two equal end-of-year payments at 12% compounded annually. 11rn tool is expected to provide annual savings (in the material) of $45,000 for two years and is to be
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