Gebeng engineering Sdn Bhd, in the 25% income tax bracket, is considering the purchased of a new
Question:
Gebeng engineering Sdn Bhd, in the 25% income tax bracket, is considering the purchased of a new Gas-Liquid Phase separator that will yield benefits of RM300000 for year 1, RM400000 for year 2, RM500000 for year 3, RM500000 for year 4, and RM500000 for year 5. The separator is to be depreciated using the modified accelerated cost recovery system (MACRS) with 5-year recovery period (5-year property depreciation for Personal Property: Half year Convention)..
The company believes that the machinery can be sold at the end of five years for 25% of the original purchase price, X. From the purchasing exercise carried out, calculate the machine purchase cost, X, the company could pay if it requires a 20% after tax rate of return?
Process Dynamics And Control
ISBN: 978-0471000778
2nd Edition
Authors: Dale E. Seborg, Thomas F. Edgar, Duncan A. Mellich