Question
In: Accounting
A company is considering the purchase of an industrial laser for $150,000. The device has a...
A company is considering the purchase of an industrial laser for $150,000. The device has a useful life of five years and a salvage (market) value of $30,000 at the end of those five years. The before-tax cash flow is estimated to be $45,000 per year. The laser would be depreciated using MACRS with a recovery period of three years. If the effective income tax is 25% and the after-tax MARR is 15%, use the PW method on an after-tax basis to determine the profitability of the laser and make a recommendation.
** Please do the math by hand and NOT using Excel, thank you.
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ekkarill92 answered 2 years agoRelated Solutions
A company is considering the purchase of an industrial laser for $150,000. The device has a...
A company is considering the purchase of an industrial laser for
$150,000. The device has a useful life of five years and a salvage
(market) value of $30,000 at the end of those five years. The
before-tax cash flow is estimated to be $45,000 per year. The laser
would be depreciated using MACRS with a recovery period of three
years. If the effective income tax is 25% and the after-tax MARR is
15%, use the PW method on an after-tax...
A company is considering the purchase of an industrial laser for $150,000. The device has a...
A company is considering the purchase of an industrial laser for
$150,000. The device has a useful life of five years and a salvage
(market) value of $30,000 at the end of those five years. The
before-tax cash flow is estimated to be $45,000 per year. The laser
would be depreciated using MACRS with a recovery period of three
years. If the effective income tax is 25% and the after-tax MARR is
15%, use the PW method on an after-tax...
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would be depreciated using MACRS with a recovery period of three
years. If the effective income tax is 25% and the after-tax MARR is
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