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Determine which is the better alternative, assuming using straight-line depreciation method, an income tax rate of 40% and an after-tax MARR of 10%. Show complete solution

Determine which is the better alternative, assuming using straight-line depreciation method, an income tax rate of 40% and an after-tax MARR of 10%. Show complete solution

Structural Analysis
Structural Analysis
6th Edition
ISBN:9781337630931
Author:KASSIMALI, Aslam.
Publisher:KASSIMALI, Aslam.
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
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Determine which is the better alternative, assuming using straight-line depreciation method, an income tax rate of 40% and an after-tax MARR of 10%. Show complete solution

Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data: Machine A Machine B Capital Investment | $30,000 $20,000 12 years $4,000 Life Salvage Value Annual Receipts 8 years $0 $188,000 $170,000 $150,000 |$138,000 Annual Disbursements
Transcribed Image Text:Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data: Machine A Machine B Capital Investment | $30,000 $20,000 12 years $4,000 Life Salvage Value Annual Receipts 8 years $0 $188,000 $170,000 $150,000 |$138,000 Annual Disbursements
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