has a cost of $53,600, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $84,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative. AWA = $enter a dollar amount AWB = $enter a dollar amount Which should be selected? What must be Investment B's cost of operating expenses for these two investments to be equivalent? $enter a dollar amount
has a cost of $53,600, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $84,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative. AWA = $enter a dollar amount AWB = $enter a dollar amount Which should be selected? What must be Investment B's cost of operating expenses for these two investments to be equivalent? $enter a dollar amount
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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has a cost of $53,600, lasts 9 years with no salvage value, and costs $150,000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $84,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 25%, and MARR is an after-tax 10%.
- Based upon the use of MACRS-GDS
depreciation , compare the AW of each alternative.
AWA = $enter a dollar amount
AWB = $enter a dollar amount
Which should be selected? - What must be Investment B's cost of operating expenses for these two investments to be equivalent? $enter a dollar amount
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