Case Study #4 Excel Submission - Capital Budgeting Comprehensive Probl Pinnacle Custom Home Builders purchased a 40 foot articulating boom lift three years $55,000. The equipment has been depreciated under the 5-year MACRS schedule (209 19%, 12%, 12% & 5%). The old equipment can be sold for $35,000. Pinnacle is considering the purchase of a new 60 foot articulating boom lift that wo the company to complete nearly all of its construction projects without the need for cos lifts. The new lift could be purchased for $105,000 and would also fall under the 5-year depreciation schedule. Assume the old and new equipment would provide the following operating gains ( over the next six years. New Equipment Old Equipment H $40,000 $25,000 2 38,000 16,000 3. 35,000 9,000 4. 30,000 8,000 5. 25,000 6,000 6.... 22,500 5,000 The firm has a 30 percent tax rate and a 7 percent cost of capital. Should the new e be purchased to replace the old equipment