A heat exchanger purchased by Hot Spot Manufacturing cost $24,000. The exchanger will save $4,500 in...

A heat exchanger purchased by Hot Spot Manufacturing cost $24,000. The exchanger will save $4,500 in each of the next 10 years. Hot Spot will use SOYD depreciation over a six-year depreciable life. The declared salvage value is $3,000. It is expected the exchanger will be sold for the declared value. Hot Spot pays taxes at a combined rate of 42% and has a MARR of 8%. Was the purchased justified?

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Rahul Sunny answered 1 week ago

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