A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $18,500. The instrument will be used for 6 years and be worth $2,750 at that time. The annual cost of use and maintenance will be $6,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $26,500, with use and maintenance costs of only $7,000 and salvage value after 6 years of $3,000. The marginal tax rate is 25%, and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Alternative 1: $ Alternative 2: $
A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $18,500. The instrument will be used for 6 years and be worth $2,750 at that time. The annual cost of use and maintenance will be $6,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $26,500, with use and maintenance costs of only $7,000 and salvage value after 6 years of $3,000. The marginal tax rate is 25%, and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Alternative 1: $ Alternative 2: $
Chapter1: Making Economics Decisions
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Subject:- economics
![A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property
class) is under consideration by a construction firm for $18,500. The instrument will be used for 6 years and be worth $2,750 at that
time. The annual cost of use and maintenance will be $6,500. Alternatively, a more automated instrument (same property class)
available from the manufacturer costs $26,500, with use and maintenance costs of only $7,000 and salvage value after 6 years of
$3,000. The marginal tax rate is 25%, and MARR is an after-tax 12%.
Determine which alternative is less costly, based upon comparison of after-tax annual worth.
Show the AW values used to make your decision:
Alternative 1: $
Alternative 2: $
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F625e400a-444b-4a1e-8aa6-79b2dfefb865%2F05f37b20-0d8c-4ec7-9151-c06a38647320%2Fdcvhhc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property
class) is under consideration by a construction firm for $18,500. The instrument will be used for 6 years and be worth $2,750 at that
time. The annual cost of use and maintenance will be $6,500. Alternatively, a more automated instrument (same property class)
available from the manufacturer costs $26,500, with use and maintenance costs of only $7,000 and salvage value after 6 years of
$3,000. The marginal tax rate is 25%, and MARR is an after-tax 12%.
Determine which alternative is less costly, based upon comparison of after-tax annual worth.
Show the AW values used to make your decision:
Alternative 1: $
Alternative 2: $
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10.
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