Two fixtures are being considered for a particular job in a manufacturing firm. The pertinent data...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Two fixtures are being considered for a particular job in a manufacturing firm. The pertinent data for their comparison are summarized in the following table. The effective federal and state income tax rate is 25%. Depreciation recapture is also taxed at 25%. If the after-tax MARR is 8% per year, which of the two fixtures should be recommended? Assume repeatability. Capital investment Annual operating expenses Useful life Market value Fixture X $30,000 $3,000 6 years $6,000 Depreciation method SL to zero book value over 5 years Fixture Y $40,000 $2,500 8 years $4,000 MACRS (GDS) with 5-year recovery period Click the icon to view the GDS Recovery Rates (r) for the 5-year property class. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. Calculate the AW value for the Fixture X. AWX (8%)=$-6830 (Round to the nearest dollar.) Calculate the AW value for the Fixture Y. AWY (8%) = $ (Round to the nearest dollar.) Two fixtures are being considered for a particular job in a manufacturing firm. The pertinent data for their comparison are summarized in the following table. The effective federal and state income tax rate is 25%. Depreciation recapture is also taxed at 25%. If the after-tax MARR is 8% per year, which of the two fixtures should be recommended? Assume repeatability. Capital investment Annual operating expenses Useful life Market value Fixture X $30,000 $3,000 6 years $6,000 Depreciation method SL to zero book value over 5 years Fixture Y $40,000 $2,500 8 years $4,000 MACRS (GDS) with 5-year recovery period Click the icon to view the GDS Recovery Rates (r) for the 5-year property class. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. Calculate the AW value for the Fixture X. AWX (8%)=$-6830 (Round to the nearest dollar.) Calculate the AW value for the Fixture Y. AWY (8%) = $ (Round to the nearest dollar.)
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
How would you apply this concepts to call center statistics? There are two numerical ways of describing quantitative variables, namely measures of location, and measures of dispersion. Measures of...
-
Calculate the following, round off to the correct number of significant figures, and express your result in scientific notation. (a) (200.9)(569.3) (b) (0.000000513)(62.3 10 7 ) (c) 28401 + (5.78 ...
-
Starbucks Corporation and PepsiCo formed a joint venture to produce and distribute Starbucks bottled Frappuccino coffee drink throughout North America. Assume that the 50/50 joint venture had a book...
-
Identify responsibility centers (Learning Objective 5) Fill in the blanks with the phrase that best completes the sentence. A cost center A responsibility center Lower An investment center A profit...
-
The maintenance foreman of a plant in reviewing his records found that a large press had the following maintenance cost record: After consulting with a lubrication specialist, he changed the...
-
Cost of Quality Report A quality control activity analysis indicated the following four activity costs of a hotel: Sales are $ 3 , 3 0 0 , 0 0 0 . Prepare a cost of quality report. Round percent of...
-
Lingering vibrations and hazy sounds in Debussy's piano music are the result of what? Multiple Choice Frequent use of the damper pedal Improper chord progressions Avoidance of traditional notation Ato
-
18 Below are producion and sales data for three products. Joint costs amounted to P 35,000 UNITS COST QUANT PRODUCE SELLING PRICE AFTER ITY 23 27 2222222222 28 19 PRODUCT D SPLIT-OFF SOLD 20 M 1,500...
-
CLO3 (Total 25 Marks) The standard cost card for a product is shown belowfor the period ended July 2019: Direct materials Direct labour 6 kilos @ $3.25 per kilo 2.5 hours @ $11.50 per hour Monthly...
-
explain the primary job responsibilities required of a DBA. Also the difference between a data administrator and a database administrator.?
-
HKT Ltd manufactures different types of metal photo frames in a highly automated facility. The company has adopted a standard costing system. The standard cost per photo frame are: Direct material:...
-
What are the steps in the process one follows when transforming an ERD into a physical database design?
-
A random sample of n = 25 is taken in order to calculate a 95% confidence interval estimate of the population variance, 2. Suppose the sample variance was calculated to be s2 = 160. What is the value...
-
What types of questions can be answered by analyzing financial statements?
-
Bond Features Define the following terms related to bonds payable. Debenture bonds Secured bonds Convertible bonds Callable bonds Face value of the bonds Face rate of interest Issue price
-
Do you agree with this statement: All liabilities could be legally enforced in a court of law? (Appendix)
-
Effect of Bond Issuance A bond with a face value of $10,000 is issued at a discount of $800 on January 1, 2008. The face rate of interest on the bond is 7%. Required 1. Was the market rate at the...
Study smarter with the SolutionInn App