Question: A firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 17%, and MACRS depreciation is used. If

 A firm must decide between two silicon layer chip designs from

A firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 17%, and MACRS depreciation is used. If the desired after-tax return on investment is 8% per year, which design should be chosen? Design A $960,000 $940,000 Design B $2,070,000 $1,200,000 Capital investment MV at end of useful life Annual revenues less expenses MACRS property class Useful life $190,000 $320,000 5 years 7 years 5 years 6 years 3 Click the icon to view the GDS Recovery Rates (r) for the 5-year property class. Calculate the AW value for the Design A. AWA(8%) = $ (Round to the nearest dollar.)

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