An agricultural corporation paying 53% tax rate wants to build a grain elevator designed to last 25 years at an initial cost of $80,000 with no salvage value. Annual income generated will be $22,500 with annual expenditures to be $12,000. Using straight-line depreciation and a 10% interest rate, what is the 25-years after-tax present worth of the project? Repeat using the sum-of-the-years digits depreciation method.
An agricultural corporation paying 53% tax rate wants to build a grain elevator designed to last 25 years at an initial cost of $80,000 with no salvage value. Annual income generated will be $22,500 with annual expenditures to be $12,000. Using straight-line depreciation and a 10% interest rate, what is the 25-years after-tax present worth of the project? Repeat using the sum-of-the-years digits depreciation method.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An agricultural corporation paying 53% tax rate wants to build a grain elevator designed to last 25 years at an initial cost of $80,000 with no salvage value. Annual income generated will be $22,500 with annual expenditures to be $12,000. Using straight-line
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