Salvage Years N 0 Net Expenses Investment A company is consider buying a new machine for $8,550. The manufacturer tells you that the machine, with regular maintenance of around $195 per year, should be able to continue working for 11 years. Based on your calculations the salvage value at that time should be about $525. According to the current asset class table the allowable depreciation rate for this machine would be 25%. If the company's tax rate is 55% and their after-tax MARR is 12%, what is the after tax annual worth of this investment? Use four decimal place accuracy for the CTF and CSF. Answer: 878 x (-1,005.28) 1
Salvage Years N 0 Net Expenses Investment A company is consider buying a new machine for $8,550. The manufacturer tells you that the machine, with regular maintenance of around $195 per year, should be able to continue working for 11 years. Based on your calculations the salvage value at that time should be about $525. According to the current asset class table the allowable depreciation rate for this machine would be 25%. If the company's tax rate is 55% and their after-tax MARR is 12%, what is the after tax annual worth of this investment? Use four decimal place accuracy for the CTF and CSF. Answer: 878 x (-1,005.28) 1
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Salvage
Years
N
0
Net Expenses
Investment
A company is consider buying a new machine for $8,550. The manufacturer tells you that the machine, with regular maintenance of
around $195 per year, should be able to continue working for 11 years. Based on your calculations the salvage value at that time
should be about $525. According to the current asset class table the allowable depreciation rate for this machine would be 25%.
If the company's tax rate is 55% and their after-tax MARR is 12%, what is the after tax annual worth of this investment?
Use four decimal place accuracy for the CTF and CSF.
Answer:
878 (-1,005.28)
1](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F65db60f7-5995-45dc-a0c4-6c96675164da%2Feabb1efb-de3e-4853-9d48-32bc5bf4b185%2Fbpjs9fk_processed.png&w=3840&q=75)
Transcribed Image Text:Salvage
Years
N
0
Net Expenses
Investment
A company is consider buying a new machine for $8,550. The manufacturer tells you that the machine, with regular maintenance of
around $195 per year, should be able to continue working for 11 years. Based on your calculations the salvage value at that time
should be about $525. According to the current asset class table the allowable depreciation rate for this machine would be 25%.
If the company's tax rate is 55% and their after-tax MARR is 12%, what is the after tax annual worth of this investment?
Use four decimal place accuracy for the CTF and CSF.
Answer:
878 (-1,005.28)
1
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