Adco industries makes heavy machinery and they have a specialized soldering machine. This machine requires annual maintenance, for which they pay $5000 a year. The original cost of the machine was $150,000. It is expected that the soldering machine will last 16 years, and will have a salvage value of $11,000. Adco pays taxes at a rate of 40% and expects an after-tax return of 8% on investments. What is the after tax annul cost if the soldering machine? The CCA rate for this type of equipment is 20 percent. (Hint: Find CTF and CSF, then the annual worth).
Adco industries makes heavy machinery and they have a specialized soldering machine. This machine requires annual maintenance, for which they pay $5000 a year. The original cost of the machine was $150,000. It is expected that the soldering machine will last 16 years, and will have a salvage value of $11,000. Adco pays taxes at a rate of 40% and expects an after-tax return of 8% on investments. What is the after tax annul cost if the soldering machine? The CCA rate for this type of equipment is 20 percent. (Hint: Find CTF and CSF, then the annual worth).
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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