3. An investor purchased new machinery for $25,000 that qualifies for 100% bonus depreciation. The machinery...
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3. An investor purchased new machinery for $25,000 that qualifies for 100% bonus depreciation. The machinery is expected to increase earnings by $8,000 per year over its 5-year life, when it will be sold for $6,000. What is the before-tax present worth and rate of return? Use a MARR of 15%. Step 1: Compute before-tax cash flows and draw the diagram (6 points) Year Step 2: Solve for the before-tax present worth. (6 points) Cash Flow 3. An investor purchased new machinery for $25,000 that qualifies for 100% bonus depreciation. The machinery is expected to increase earnings by $8,000 per year over its 5-year life, when it will be sold for $6,000. What is the before-tax present worth and rate of return? Use a MARR of 15%. Step 1: Compute before-tax cash flows and draw the diagram (6 points) Year Step 2: Solve for the before-tax present worth. (6 points) Cash Flow
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