A large profitable company, in the 40% federal/state tax bracket, is considering the purchase of a new

Question:

A large profitable company, in the 40% federal/state tax bracket, is considering the purchase of a new piece of equipment. The new equipment will yield benefits of $10,000 in Year 1, $15,000 in Year 2, $20,000 in. Year 3, and $20,000 in Year4, the equipment is to be depreciated using 5-year MACRS depreciation starting in the year of purchase (Year 0). It is expected that the equipment will be sold at the end of fourth year at 20% of its purchase price. What is the maximum equipment purchase price the company can pay if is after-tax MARR is 10%?

Depreciation
Depreciation is an important concept in accounting. By definition, depreciation is the wear and tear in the value of a noncurrent asset over its useful life. In simple words, depreciation is the cost of operating a noncurrent asset producing... MARR
Minimum Acceptable Rate of Return (MARR), or hurdle rate is the minimum rate of return on a project a manager or company is willing to accept before starting a project, given its risk and the opportunity cost of forgoing other...