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 $18.000. The instrument will be used for 6 years and be worth $3,000 at that time. The annual cost of use and maintenance will be $13,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $27.000. with use and maintenance costs of only $8.500 and salvage value after 6 years of $1,500. 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: S Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ± 10.

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 $18.000. The instrument will be used for 6 years and be worth $3,000 at that time. The annual cost of use and maintenance will be $13,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $27.000. with use and maintenance costs of only $8.500 and salvage value after 6 years of $1,500. 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: S Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ± 10.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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 $18,000. The instrument will be used for 6 years and be worth $3,000 at that
time. The annual cost of use and maintenance will be $13,500. Alternatively, a more automated instrument (same property class)
available from the manufacturer costs $27.000,with use and maintenance costs of only $8.500 and salvage value after 6 years of
$1,500. 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: S
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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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 $24,000. The instrument will be used for 6 years and be worth $1,000 at that time. The annual cost of use and maintenance will be $11,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $28,500, with use and maintenance costs of only $7,500 and salvage value after 6 years of $2,500. 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. select an alternative Show the AW values used to make your decision:Alternative 1: $enter a dollar amount Alternative 2: