A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $25,500. The instrument will be used for 6 years and be worth $2,500 at that time. The annual cost of use and maintenance will be $13,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $26,000, with use and maintenance costs of only $7,500 and salvage value after 6 years of $3,000. The marginal tax rate is 25%, and MARR is an after-tax 12%.

Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision.

Answer rating: 100% (QA)

Given in the question following information Tax Rate 25 MARR after tax 12i Equipment 1A portable con... View the full answer