7 A firm must decide between two designs. Their effective income tax rate is 15%, and MACRS depreciation is used. If the desired after-tax return on investment is 11% per year, which design should be chosen?Design ADesign B$910,000$900,000$260,000$2,070,000$1,180,000$340,0005 yearsCapital investmentMV at end of useful lifeAnnual revenues less expensesMACRS property class5 years7 yearsUseful life6 yearsClick the icon to view the GDS Recovery Rates (rı) for the 5-year property class.Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year.Calculate the AW value for the Design A.AWA (11%) = $ 127,956 (Round to the nearest dollar.)%3DCalculate the AW value for the Design B.AWB (11%) = $ – 18,121 (Round to the nearest dollar.)Based on the AW values, Design A should be chosen.

Annual worth or AW is referred to as the easy way of understanding the annual amount, for instance,…

A firm must decide between two designs. Their effective income tax rate is 15%, and MACRS depreciation is used. If the desired after-tax return on investment is 11% per year, which design should be chosen? Design A Design B Capital investment $910,000 $2,070,000 MV at end of useful life $900,000 $1,180,000 Annual revenues less expenses $260,000 $340,000 MACRS property class Useful life 5 years 7 years 5 years 6 years 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 11% per year. Calculate the AW value for the Design A. AWA (11%) = $ 127,956 (Round to the nearest dollar.) Calculate the AW value for the Design B. AWB (11%) = $ - 18,121 (Round to the nearest dollar.) Based on the AW values, Design A should be chosen.

A firm must decide between two designs. Their effective income tax rate is 15%, and MACRS depreciation is used. If the desired after-tax return on investment is 11% per year, which design should be chosen? Design A Design B Capital investment $910,000 $2,070,000 MV at end of useful life $900,000 $1,180,000 Annual revenues less expenses $260,000 $340,000 MACRS property class Useful life 5 years 7 years 5 years 6 years 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 11% per year. Calculate the AW value for the Design A. AWA (11%) = $ 127,956 (Round to the nearest dollar.) Calculate the AW value for the Design B. AWB (11%) = $ - 18,121 (Round to the nearest dollar.) Based on the AW values, Design A should be chosen.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A79. Which of the following is the most likely consequence of implementing the ‘Unified Payments Interface (UPI)’? (a) Mobile wallets will not be necessary for online payments. (b) Digital currency will totally replace the physical currency in about two decades. (c) FDI inflows will drastically increase. (d) Direct transfer of subsidies to poor people will become very effective.
63
3 Calculate the income taxes that a person has to pay considering the table below- If a person's income is $6,500, how much does he pay in taxes? If a person's income is $13,500, how much does she pay in taxes? (a) (b) Taxable Up to $5,000 $5,001-$10,000 $10,001-$15,000 Income Taxes 10% of taxable income 14% of taxable income 16% of taxable income
Price of X = $2 Income $24 = Price of Y=$4 Qx TUX MUX MUx/Px Qy TUY MUY MUy/Py 1 24 24 2 46 24 24 12 1 40 040 10 2 72 3 20 20 3 100 4 A 9 4 5 dings 5 100 16 5 16 4 6 114 6 144 es The correct value for the blank labeled A is