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 $209,000 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 $74,000. If the projected operating expense for b equipment is $64,000 per year, what is the after-tax equivalent uniform annual cost (EUAC) of owning and operating this equipment? The effective income tax rate is 25%, and the after-tax MARR is 11% per y Click the icon to view the GDS Recovery Rates (r) for the 5-year property class. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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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 $209,000 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 $74,000. If the projected operating expense for the
equipment is $64,000 per year, what is the after-tax equivalent uniform annual cost (EUAC) of owning and operating this equipment? The effective income tax rate is 25%, and the after-tax MARR is 11% per year.
Click the icon to view the GDS Recovery Rates (r) for the 5-year property class.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year.
The after-tax equivalent uniform annual cost is $ (Round to the nearest dollar.)
More Info
GDS Recovery Rates (k)
5-year Property Class
0.2000
0.3200
0.1920
0.1152
0.1152
0.0576
Year
1
2
3
4
5
6
Print
Done
4
C
More Info
N
1
2
3
4
5
Discrete Compounding; /= 11%
Single Payment
Compound
Amount
Factor
To Find F
Given P
FIP
1.1100
P
1.2321
1.3676
1.5181
1.6851
Present
Worth Factor
To Find P
Given F
. PIF
0.9009
0.8116
0.7312
0.6587
0.5935
Compound
Amount
Factor
To Find F
Given A
FIA
1.0000
2.1100
3.3421
4.7097
6.2278
Uniform Series
Present
Worth Factor
To Find P
Given A
PIA
0.9009
1.7125
2.4437
3.1024
3.6959
Sinking
Fund
Factor
To Find A
Given F
A/F
1.0000
0.4739
0.2992
0.2123
0.1606
Capital
Recovery
Factor
To Find A
Given P
A/P
1.1100
0.5839
0.4092
0.3223
0.2706
#
- X
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 $209,000 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 $74,000. If the projected operating expense for the equipment is $64,000 per year, what is the after-tax equivalent uniform annual cost (EUAC) of owning and operating this equipment? The effective income tax rate is 25%, and the after-tax MARR is 11% per year. Click the icon to view the GDS Recovery Rates (r) for the 5-year property class. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. The after-tax equivalent uniform annual cost is $ (Round to the nearest dollar.) More Info GDS Recovery Rates (k) 5-year Property Class 0.2000 0.3200 0.1920 0.1152 0.1152 0.0576 Year 1 2 3 4 5 6 Print Done 4 C More Info N 1 2 3 4 5 Discrete Compounding; /= 11% Single Payment Compound Amount Factor To Find F Given P FIP 1.1100 P 1.2321 1.3676 1.5181 1.6851 Present Worth Factor To Find P Given F . PIF 0.9009 0.8116 0.7312 0.6587 0.5935 Compound Amount Factor To Find F Given A FIA 1.0000 2.1100 3.3421 4.7097 6.2278 Uniform Series Present Worth Factor To Find P Given A PIA 0.9009 1.7125 2.4437 3.1024 3.6959 Sinking Fund Factor To Find A Given F A/F 1.0000 0.4739 0.2992 0.2123 0.1606 Capital Recovery Factor To Find A Given P A/P 1.1100 0.5839 0.4092 0.3223 0.2706 # - X
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