The taxable income for a motorcycle sales and repair business is estimated to be $150,000 this year.

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The taxable income for a motorcycle sales and repair business is estimated to be $150,000 this year. A single-value tax rate of 39% is used. A new engine diagnostics system will cost $40,000 and have an average annual depreciation of $8000. The equipment will increase gross income by an estimated $9000 and expenses by $2000 for the year.

Compute the expected change in income taxes for the year if the new system is purchased.


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Engineering economy

ISBN: 978-0073376301

7th Edition

Authors: Leland Blank, Anthony Tarquin

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