A commercial smart oven that costs $300,000 is expected to operate for 7 years. The estimated salvage
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A commercial smart oven that costs $300,000 is expected to operate for 7 years. The estimated salvage value at the end of 7 years is $40,000. The oven is expected to save the company $70,000 in annual operating costs before taxes and depreciation. The company will depreciate this system on a 5-year MACRS schedule. If the firm’s cost of capital is 15% and its marginal tax rate is 25%, compute the NPV and the IRR for the project. (5-YEAR MACRS schedule: 20%, 32%, 19.2%, 11.52%, 11.52%, 5.76%)
Related Book For
Accounting Principles
ISBN: 978-0470534793
10th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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