Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A Basis, $ Gross Income (GI), $ Operating Expense (OE), $ Salvage Value, $ MARCS Recovery, Years 150,000 100,000 30,000 15,000 5 Alt.B 225,000 100,000 10,000 22,500 5

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective
income tax rate is 35%, answer the following true/false questions.
Alt. A
150,000
100,000
Basis, $
Gross Income (GI), $
Operating Expense (OE), $
Salvage Value, $
MARCS Recovery, Years
True
30,000
False
15,000
5
Alt.B
The depreciation charge for Alt. B at the end of year 4 is greater than $30,000.
225,,000
100,000
10,000
22,500
5
Transcribed Image Text:Pertinent information for two alternatives A and B is shown below. If i=10%/year and the effective income tax rate is 35%, answer the following true/false questions. Alt. A 150,000 100,000 Basis, $ Gross Income (GI), $ Operating Expense (OE), $ Salvage Value, $ MARCS Recovery, Years True 30,000 False 15,000 5 Alt.B The depreciation charge for Alt. B at the end of year 4 is greater than $30,000. 225,,000 100,000 10,000 22,500 5
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