Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 14, Problem 49P

a:

To determine

Calculate the economic life.

b:

To determine

Calculate the economic life with different interest rate.

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Henredon purchases a high-precision programmable router for shaping furniture components for $190,000. It is expected to last 12 years and have a salvage value of $5,000. It will produce $45,000 in net revenue each year during its life. Corporate income taxes are 40 percent, and the after-tax MARR is 10 percent. Determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR, if the router is kept for 12 years.   After-tax PW: $enter a dollar amount rounded to the nearest dollar    After-tax AW: $enter a dollar amount rounded to the nearest dollar      After-tax IRR: enter percentages rounded to 1 decimal place % After-tax ERR: enter percentages rounded to 1 decimal place
An energy production company has the following information regarding the acquisition of new gas- turbine equipment. Purchase price = S780,000 Trans-oceanic shipping and delivery cost =$4300 Installation cost (1 technician at $1600 per day for 4 days) = $6400 Tax recovery period = 15 years Book depreciation recovery period = 10 years Salvage value = 10% of purchase price Operating cost (with technician) = $185,000 per year The manager of the department asked your friend in Accounting to enter the appropriate data into the tax-accounting program. What are the values of B, n, and S in depreciating the asset for tax purposes that he should enter?
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