1. GridCo Analytics needs to purchase new land surveying equipment. GridCo's after taxMARR is 9% and the corporate tax rate is 42%. Surveying equipment is a CCA Class 8asset. The remaining data are contained in the table below.ModelFirst CostEconomic LifeAnnual NetSalvage Value(Years)$20,000$25,000$30,000(a) Using the annual worth method, which model should BlastCo buy? '$110,000$130,000$155,000Savings| $65,000$85,000$90,000Ranger5Sonic_Flex5Laser_Metric5(b) What is the approximate after tax IRR of each model? ((c) What is the exact after tax IRR of each model? tcas

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1. GridCo Analytics needs to purchase new land surveying equipment. GridCo's after tax MARR is 9% and the corporate tax rate is 42%. Surveying equipment is a CCA Class 8 asset. The remaining data are contained in the table below. Economic Life Annual Net Savings $65,000 $85,000 $90,000 Model First Cost Salvage Value (Years) Ranger Sonic_Flex Laser_Metric (a) Using the annual worth method, which model should BlastCo buy? ' $110,000 $130,000 $155,000 $20,000 $25,000 $30,000 5 5 5

1. GridCo Analytics needs to purchase new land surveying equipment. GridCo's after tax MARR is 9% and the corporate tax rate is 42%. Surveying equipment is a CCA Class 8 asset. The remaining data are contained in the table below. Economic Life Annual Net Savings $65,000 $85,000 $90,000 Model First Cost Salvage Value (Years) Ranger Sonic_Flex Laser_Metric (a) Using the annual worth method, which model should BlastCo buy? ' $110,000 $130,000 $155,000 $20,000 $25,000 $30,000 5 5 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You have been asked to perform a sensitivity analysis on a plant modernization plan. The initial investment is $30,000. Expected annual savings is $13,000. Salvage value is $7,000 after a 7 year planning horizon. The MARR is 12%. Determine the AW if the annual savings change by the following percentages from the initial estimate: b. -80%c. -60%d. -40%e. -20%f. +20%g. +40%h. Determine the percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the project
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