Pertinent information for two alternatives A and B is shown below. If i-10%/year and the effectiveincome tax rate is 35%, answer the following true/false questions.Alt. AAlt.BBasis, $150,000225,,000Gross Income (GI), $100,000100,000Operating Expense (OE), $30,00010,000Salvage Value, $15,00022,500MARCS Recovery, YearsThe CFAT at the end of year 5 for Alt. A is greater than $50,000.O TrueO False

Answered: Alt. A Alt.B 150,000 225,,000 come…

Alt. A Alt.B 150,000 225,,000 come (GI), $ 100,000 100,000 ng Expense (OE), $ 30,000 10,000 Value, $ 15,000 22,500 Recovery, Years AT at the end of year 5 for Alt. A is greater than $50,000. 5n 5.

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

Pertinent information for two alternatives A and B is shown below. If i-10%/year and the effective
income tax rate is 35%, answer the following true/false questions.
Alt. A
Alt.B
Basis, $
150,000
225,,000
Gross Income (GI), $
100,000
100,000
Operating Expense (OE), $
30,000
10,000
Salvage Value, $
15,000
22,500
MARCS Recovery, Years
The CFAT at the end of year 5 for Alt. A is greater than $50,000.
O True
O False

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