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 $22,000. The instrument will be used for 6 years and be worth $2,000 at that time. The annual cost of use and maintenance will be $9,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $29,000, with use and maintenance costs of only $7,500 and salvage value after 6 years of $3,000. The income-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.
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 $22,000. The instrument will be used for 6 years and be worth $2,000 at that time. The annual cost of use and maintenance will be $9,500. Alternatively, a more automated instrument (same property class) available from the
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