An asset with a first cost of $9000 is depreciated by MACRS over a 5-year recovery period.

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An asset with a first cost of $9000 is depreciated by MACRS over a 5-year recovery period. The CFBT is estimated at $10,000 for the first 4 years and $5000 thereafter as long as the asset is retained. The effective tax rate is 40%, and money is worth 10% per year. In present worth dollars, how much of the cash flow generated by the asset over its recovery period is lost to taxes?

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Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

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