Six years ago, a company purchased $30,000 of equipment. The equipment has just been sold for $5000. The equipment was depreciated using 50% bonus depreciation / 50% MACRS (using a 5-year recovery period). The actual savings due to the purchase of the equipment is shown below. The firm's MARR is 12% and it's tax rate is 25%. What is the after-tax present worth of the investment?
Six years ago, a company purchased $30,000 of equipment. The equipment has just been sold for $5000. The equipment was depreciated using 50% bonus depreciation / 50% MACRS (using a 5-year recovery period). The actual savings due to the purchase of the equipment is shown below. The firm's MARR is 12% and it's tax rate is 25%. What is the after-tax present worth of the investment?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![PLEASE USE EXCEL AND SHOW FORMULAS
Six years ago, a company purchased $30,000 of equipment. The equipment
has just been sold for $5000. The equipment was depreciated using 50% bonus
depreciation / 50% MACRS (using a 5-year recovery period). The actual savings
due to the purchase of the equipment is shown below. The firm's MARR is 12%
and it's tax rate is 25%. What is the after-tax present worth of the investment?
Year
1
2
3
4
5
6
Savings 5000
6000
7000
7000
4000
3000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F081d048d-cc6b-474c-a425-dba71ab92404%2Fc3b42e71-38e1-4051-82c6-ae5c85ea6ef6%2Ftbb1o2e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:PLEASE USE EXCEL AND SHOW FORMULAS
Six years ago, a company purchased $30,000 of equipment. The equipment
has just been sold for $5000. The equipment was depreciated using 50% bonus
depreciation / 50% MACRS (using a 5-year recovery period). The actual savings
due to the purchase of the equipment is shown below. The firm's MARR is 12%
and it's tax rate is 25%. What is the after-tax present worth of the investment?
Year
1
2
3
4
5
6
Savings 5000
6000
7000
7000
4000
3000
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