Question: 2. (25 points) Determine whether the following contract described below is worthwhile of undertaking after taxes if at the end of the 3-year of ownership

2. (25 points) Determine whether the following contract described below is

2. (25 points) Determine whether the following contract described below is worthwhile of undertaking after taxes if at the end of the 3-year of ownership the contract, you are expected to be able to sell the land and equipment. Use the Present Worth analysis under MARR of 15% and effective tax rate. Explanation Includes land and equipment Increasing by $10,000 for each year of useful life Capital investment: $400,000 Land investment: $300,000 Annual benefit: $70,000 Useful life: 7 years Land market value (EOY 3): $350,000 Equipment market value (EOY 3): $80,000 Depreciation: GDS7 Federal tax rate: 30% State tax rate: 4.28% The MARCS depreciation percentages (GDS7) for each year are:14.29; 24.49; 17.49; 12.49; 8.93; 8.92; 8.93; 4.46

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