Your company has just signed a three-year nonrenewable contract with the city of New Orleans for earthmoving work. You are investigating the purchase of heavy construction equipment for this job. The equipment costs $203,000 and qualifies for five-year MACRS depreciation. At the end of the three-year contract, you expect to be able to sell the equipment for $65.000. If the projected operating expense for the equipment is S65,000 per year, what is the after-tax equivalent uniform annual cost (EUAC) of owning and operating this equipment? The effective income tax rate is 21%, and the after-tax MARR is 13% per year Click the icon to view the GDS Recovery Rates () for the 5-year property class. A Click the icon to view the interest and annuity table for discrete compounding when the MARR is 13% per year
Your company has just signed a three-year nonrenewable contract with the city of New Orleans for earthmoving work. You are investigating the purchase of heavy construction equipment for this job. The equipment costs $203,000 and qualifies for five-year MACRS depreciation. At the end of the three-year contract, you expect to be able to sell the equipment for $65.000. If the projected operating expense for the equipment is S65,000 per year, what is the after-tax equivalent uniform annual cost (EUAC) of owning and operating this equipment? The effective income tax rate is 21%, and the after-tax MARR is 13% per year Click the icon to view the GDS Recovery Rates () for the 5-year property class. A Click the icon to view the interest and annuity table for discrete compounding when the MARR is 13% per year
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Solve it correctly please. I
Transcribed Image Text:More info
GDS Recovery Rates (r)
Year
5-year Property Class
1
0.2000
2
0.3200
3
0.1920
4
0.1152
0.1152
6
0.0576
Print
Done
Transcribed Image Text:Your company has just signed a three-year nonrenewable contract with the city of New Orleans for earthmoving work. You are investigating the purchase of heavy construction equipment for this job. The equipment costs $203,000 and qualifies for five-year
MACRS depreciation. At the end of the three-year contract, you expect to be able to sell the equipment for $65,000. If the projected operating expense for the equipment is $65,000 per year, what is the after-tax equivalent uniform annual cost (EUAC) of
owning and operating this equipment? The effective income tax rate is 21%, and the after-tax MARR is 13% per year.
Click the icon to view the GDS Recovery Rates () for the 5-year property class.
Click the icon t
view the interest and annuity table for discrete compounding when the MARR is 13% per year
The after-tax equivalent uniform annual cost is $ (Round to the nearest dollar.)
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