Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $48,000 and will generate delivery revenue of $23,000 for each of the next 6 years. At the end of the 6 years, the vehicle will have a salvage value of $4,800. The tax rate is 21%. Assuming that the vehicle is depreciated using MACRS 5-year property class, and that Fink Co. uses an after-tax MARR of 7%, compute the PW and determine whether Fink Co. should purchase the new business vehicle. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. $ Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±10. Should Fink Co. purchase the new business vehicle? Yes
Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $48,000 and will generate delivery revenue of $23,000 for each of the next 6 years. At the end of the 6 years, the vehicle will have a salvage value of $4,800. The tax rate is 21%. Assuming that the vehicle is depreciated using MACRS 5-year property class, and that Fink Co. uses an after-tax MARR of 7%, compute the PW and determine whether Fink Co. should purchase the new business vehicle. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. $ Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±10. Should Fink Co. purchase the new business vehicle? Yes
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 18E
Related questions
Question
![Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $48,000 and will generate delivery revenue of $23,000
for each of the next 6 years. At the end of the 6 years, the vehicle will have a salvage value of $4,800. The tax rate is 21%. Assuming
that the vehicle is depreciated using MACRS 5-year property class, and that Fink Co. uses an after-tax MARR of 7%, compute the PW
and determine whether Fink Co. should purchase the new business vehicle.
Click here to access the TVM Factor Table calculator.
Click here to access the MACRS-GDS Property Classes.
Click here to access the MACRS-GDS percentages page.
Click here to access the MACRS-GDS percentages for 27.5-year residential rental property.
$
Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±10.
Should Fink Co. purchase the new business vehicle?
Yes](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1f813975-766e-42fa-b31b-23a9895f4887%2F69da54d2-add7-4183-b156-7c225654d5cc%2Fs9q0bh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Fink Co. is interested in purchasing a new business vehicle. The vehicle costs $48,000 and will generate delivery revenue of $23,000
for each of the next 6 years. At the end of the 6 years, the vehicle will have a salvage value of $4,800. The tax rate is 21%. Assuming
that the vehicle is depreciated using MACRS 5-year property class, and that Fink Co. uses an after-tax MARR of 7%, compute the PW
and determine whether Fink Co. should purchase the new business vehicle.
Click here to access the TVM Factor Table calculator.
Click here to access the MACRS-GDS Property Classes.
Click here to access the MACRS-GDS percentages page.
Click here to access the MACRS-GDS percentages for 27.5-year residential rental property.
$
Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is ±10.
Should Fink Co. purchase the new business vehicle?
Yes
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