Two fixtures are being considered for a particular job in a manufacturing firm. The pertinent data for their comparison are summarized in the following table. The effective federal and state income tax rate is 55%. Depreciation recapture is also taxed at 55%. If the after-tax MARR is 10% per year, which of the two fixtures should be recommended? Assume repeatability. Capital investment Annual operating expenses Useful life Market value Depreciatia ethed Fixture X $35,000 $6,000 6 years $7,000 Fixture Y $30,000 $4,000 MACRS (CDSLith 8 years $9,000

Two fixtures are being considered for a particular job in a manufacturing firm. The pertinent data for their comparison are summarized in the following table. The effective federal and state income tax rate is 55%. Depreciation recapture is also taxed at 55%. If the after-tax MARR is 10% per year, which of the two fixtures should be recommended? Assume repeatability. Capital investment Annual operating expenses Useful life Market value Depreciatia ethed Fixture X $35,000 $6,000 6 years $7,000 Fixture Y $30,000 $4,000 MACRS (CDSLith 8 years $9,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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