Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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install cost of the new machinery is $400,000 and is expected to last for 5 years. The salvage value is expected to be $30,000 in today’s dollars.
Revenue is expected to increase by $40,000 while operating costs are expected to increase $2500 (both actual).
Determine the present worth of the project, assuming an (actual) MARR of 10%, a CCA rate of 10% and a corporate tax rate of 15%.
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