Your company has purchased equipment for $50,000 that will reduce materials and labor costs by $14,000/year for
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Your company has purchased equipment for $50,000 that will reduce materials and labor costs by $14,000/year for N years. After N years, there will be no further need for the machine, and because it is specially designed, it will have no MV at any time. However, the IRS has ruled that you must depreciate the equipment on a SL basis with a tax life of five years. If the effective income-tax rate is 40%, what is the minimum number of years your firm must operate the equipment to earn 10% per year after taxes on its investment?
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Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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