An industrial equipment is purchased for $300,000. It is expected to work for 12 years before it is sold for $50,000. Moreover, the annual cost of maintaining this equipment is

An industrial equipment is purchased for $300,000. It is expected to work for 12 years before it is
sold for $50,000. Moreover, the annual cost of maintaining this equipment is estimated to be
$20,000. Given those information and MARR=10%, answer Questions 1-4 below:
For all questions, you are required to show all calculations.
1) Use the switchover technique of 150% DB to depreciate this equipment during its service life
(1.25 marks).
2) Use the Corporate Federal Tax (2006) to construct the AFTCF given the calculations
obtained in Question I and annual revenue of $150,000 (1.25 marks).
3) Use 25% income tax rate to construct the AFTCF given the calculations obtained in Question
I and annual revenue of $150,000 (1.25 marks).
4) Calculate the PWs of the two cashflows obtained in Questions 2 & 3. (1.25 marks)

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