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TABLE P7-39 Table for Problem 7-39 Fixture X Fixture Y $30,000 $3,000 6 уears $6,000 SL to zero book Capital investment Annual operating expenses $40,000 $2,500 Useful life 8 years $4,000 MACRS (GDS) with 5-year recovery period Market value Depreciation method value over 5 years

TABLE P7-39 Table for Problem 7-39 Fixture X Fixture Y $30,000 $3,000 6 уears $6,000 SL to zero book Capital investment Annual operating expenses $40,000 $2,500 Useful life 8 years $4,000 MACRS (GDS) with 5-year recovery period Market value Depreciation method value over 5 years

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Two fixtures are being considered for a particular job in a manufacturing firm. The pertinent data for their comparison are summarized in Table. The effective federal and state income tax rate is 25%. Depreciation recapture is also taxed at 25%. If the after-tax MARR is 8% per year, which of the two
fixtures should be recommended? State any important assumptions you make in your analysis. 

TABLE P7-39 Table for Problem 7-39 Fixture X Fixture Y $30,000 $3,000 6 уears $6,000 SL to zero book Capital investment Annual operating expenses $40,000 $2,500 Useful life 8 years $4,000 MACRS (GDS) with 5-year recovery period Market value Depreciation method value over 5 years
Transcribed Image Text:TABLE P7-39 Table for Problem 7-39 Fixture X Fixture Y $30,000 $3,000 6 уears $6,000 SL to zero book Capital investment Annual operating expenses $40,000 $2,500 Useful life 8 years $4,000 MACRS (GDS) with 5-year recovery period Market value Depreciation method value over 5 years
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