Salvage Years N 0 Net Expenses Investment A company is consider buying a new machine for $8,550. The manufacturer tells you that the machine, with regular maintenance of around $195 per year, should be able to continue working for 11 years. Based on your calculations the salvage value at that time should be about $525. According to the current asset class table the allowable depreciation rate for this machine would be 25%. If the company's tax rate is 55% and their after-tax MARR is 12%, what is the after tax annual worth of this investment? Use four decimal place accuracy for the CTF and CSF. Answer: 878 x (-1,005.28) 1
Salvage Years N 0 Net Expenses Investment A company is consider buying a new machine for $8,550. The manufacturer tells you that the machine, with regular maintenance of around $195 per year, should be able to continue working for 11 years. Based on your calculations the salvage value at that time should be about $525. According to the current asset class table the allowable depreciation rate for this machine would be 25%. If the company's tax rate is 55% and their after-tax MARR is 12%, what is the after tax annual worth of this investment? Use four decimal place accuracy for the CTF and CSF. Answer: 878 x (-1,005.28) 1
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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