Question: 2) Given the following two mutually exclusive alternatives: Alternative A S30,000 5 years 5 years Straight Line Alternative B S40,000 5 years 8 years MACRS

 2) Given the following two mutually exclusive alternatives: Alternative A S30,000

2) Given the following two mutually exclusive alternatives: Alternative A S30,000 5 years 5 years Straight Line Alternative B S40,000 5 years 8 years MACRS First Cost Depreciable Life Economic Life Depreciation Method Book Value at the end of depreciable life Market Value at the end of Economic life O & M Costs/Year Effective Income Tax Rate After Tax MARR S6,000 S4,000 S3,000 34% 10% S2.500 3490 10% ash flow, Depreciation, Taxable Income, a) Draw a table with these columns Income Tax and after tax cash flow. (20 Points) b) Determ c) Which Alternative should be selected ine PW of after tax for each altemative

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