Your firm is planning to install a new capping machine at the apple juice factory. This machine is considered a special handling device for food and beverage manufacture and has an initial cost of $350,000. The capping machine is expected to generate net income of $115,000 per year for the next 4 years. Using bonus depreciation of 40% followed by MACRS, $30,000 salvage value, a federal tax rate of 21%, a state tax rate of 5.75%, and an after-tax MARR of 6%, determine the net present worth of this investment.

Your firm is planning to install a new capping machine at the apple juice factory. This machine is considered a special handling device for food and beverage manufacture and has an initial cost of $350,000. The capping machine is expected to generate net income of $115,000 per year for the next 4 years. Using bonus depreciation of 40% followed by MACRS, $30,000 salvage value, a federal tax rate of 21%, a state tax rate of 5.75%, and an after-tax MARR of 6%, determine the net present worth of this investment.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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