a proposed cost-saving device has an installed cost of 725000. The device will be used in...

a proposed cost-saving device has an installed cost of 725000. The device will be used in a five-year project but is classified as three-year MACRS property for tax purposes. The required initial net working capital investment is 135000, the marginal tax rate is 21 percent, and the,project discount rate is 13 percent. The,device has an estimated Year 5 salvage value of 98000. what level of pretax cost saving do,we require for this project to be profitable?

yr                 3 yr              5 yr            7 yr
1.                  33.33.        20. 00        14.29
2.                  44.45.        32.00.         24.49
3.                  14.81.        19.20.         17.49
4.                    7.41.         11.52.         12.49
5.                                       11.52.        12.49
6.                                          5.76.          8.93
7.                                                             8.93
8.                                                             4.46

pretax cost savings

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jeff jeffy answered 1 year ago

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