In MACRS method, the n and d are:Select one:O a. determined by the Internal revenue system.O b. none of the answers.Oc.based on free determination.O d. based on the company's book method.A company that manufactures magnetic membrane switches is investigating two production options that havethe estimated cash flows shown ($1 million units). Which one should be selected on the basis of a presentworth analysis at 10% per year?In-houseContractFirst Cost, $-30Annual Cost, $ per year-5-2Annual Income, $ per year143.1Salvage Value, $Life, years5. In-houseContractFirst Cost, $-30Annual Cost, $ per year-5-2Annual Income, $ per year143.1Salvage Value, $2Life, yearsSelect one:O a.In-house production.O b. Solution needs more cash flow estimates.Oc.Contract Production

In-house Contract First Cost, $ -30 Annual Cost, $ per year -5 -2 Annual Income, $ per year 14 3.1 Salvage Value, $ 2 Life, years Select one: O a. In-house production. O b. Solution needs more cash flow estimates. Oc. Contract Production

In-house Contract First Cost, $ -30 Annual Cost, $ per year -5 -2 Annual Income, $ per year 14 3.1 Salvage Value, $ 2 Life, years Select one: O a. In-house production. O b. Solution needs more cash flow estimates. Oc. Contract Production

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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Question

In MACRS method, the n and d are:
Select one:
O a. determined by the Internal revenue system.
O b. none of the answers.
Oc.
based on free determination.
O d. based on the company's book method.
A company that manufactures magnetic membrane switches is investigating two production options that have
the estimated cash flows shown ($1 million units). Which one should be selected on the basis of a present
worth analysis at 10% per year?
In-house
Contract
First Cost, $
-30
Annual Cost, $ per year
-5
-2
Annual Income, $ per year
14
3.1
Salvage Value, $
Life, years
5.

In-house
Contract
First Cost, $
-30
Annual Cost, $ per year
-5
-2
Annual Income, $ per year
14
3.1
Salvage Value, $
2
Life, years
Select one:
O a.
In-house production.
O b. Solution needs more cash flow estimates.
Oc.
Contract Production

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