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Instructions Consider the following investment: Initial cost = $150,000. Salvage value = $0. Annual revenue = $50,000, Annual expenses = $15,000, 40% Bonus depreciation. Depreciation life = 5 Years. MARR = 11%. Tax Rate = 21%. Depreciation method: MACRS. Hint: Set up a Cash Flow Table and solve the problem to get the IRR for both Before and After Tax Cash Flow.

Instructions Consider the following investment: Initial cost = $150,000. Salvage value = $0. Annual revenue = $50,000, Annual expenses = $15,000, 40% Bonus depreciation. Depreciation life = 5 Years. MARR = 11%. Tax Rate = 21%. Depreciation method: MACRS. Hint: Set up a Cash Flow Table and solve the problem to get the IRR for both Before and After Tax Cash Flow.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 2MAD
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Please correct answer and don't used hand raiting
Instructions Consider the following investment: Initial cost = $150,000. Salvage value = $0. Annual revenue = $50,000, Annual expenses = $15,000, 40% Bonus depreciation. Depreciation life = 5 Years. MARR = 11%. Tax Rate = 21%. Depreciation method: MACRS. Hint: Set up a Cash Flow Table and solve the problem to get the IRR for both Before and After Tax Cash Flow.
Transcribed Image Text:Instructions Consider the following investment: Initial cost = $150,000. Salvage value = $0. Annual revenue = $50,000, Annual expenses = $15,000, 40% Bonus depreciation. Depreciation life = 5 Years. MARR = 11%. Tax Rate = 21%. Depreciation method: MACRS. Hint: Set up a Cash Flow Table and solve the problem to get the IRR for both Before and After Tax Cash Flow.
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