Henredon purchases a high-precision programmable router for shaping furniture components for ($190,000.) It is expected to last
Question:
Henredon purchases a high-precision programmable router for shaping furniture components for \($190,000.\) It is expected to last 12 years and have a salvage value of \($5,000.\) It will produce \($45,000\) in net revenue each year during its life. Corporate income taxes are 40 percent, and the after-tax MARR is 10 percent. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR if the router is kept for 12 years.
a. Use straight-line depreciation (no half-year convention).
b. Use MACRS-GDS and state the appropriate property class.
c. Use double declining balance depreciation (no half-year convention, no switching).
Step by Step Answer:
Principles Of Engineering Economic Analysis
ISBN: 9781118163832
6th Edition
Authors: John A. White, Kenneth E. Case, David B. Pratt