The possibility of acquiring new machinery at a cost of $ 40,000 is being evaluated, which may
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The possibility of acquiring new machinery at a cost of $ 40,000 is being evaluated, which may be depreciated using the 5-year MACRS method. The machine should save $20,000 annually over its 5-year life and maintenance costs are estimated at $ 7,650 annually.
- If the company is taxed at a rate of 39%, determine if the investment meets the requirement of providing a minimum return of 11.5% after taxes (After-Tax analysis). Assume that at the end of its useful life, the machine will sell for $ 8,750.
- If the average inflation rate for the period is estimated at 2.7%, Calculate the real return on the investment after considering inflation.
- Determine the highest starting price that can be paid to meet the MARR
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Related Book For
Statistics for Business and Economics
ISBN: 978-0132930192
8th edition
Authors: Paul Newbold, William Carlson, Betty Thorne
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