Two concrete test instrument investment alternatives qualify for different property classes. Investment A has a cost of
Question:
Two concrete test instrument investment alternatives qualify for different property classes. Investment A has a cost of \($22,000,\) a useful life of 6 years with a salvage value of \($2,000\) at that time, and an annual cost of use and maintenance of \($9,500.\) Also, suppose it is eligible for a 3-year property class. Investment B has a cost of \($29,000,\) a useful life of 6 years with a salvage value of \($3,000\) at that time, and an annual cost of use and maintenance of \($7,500.\) It is in the 5-year property class. The marginal tax rate is 40 percent, and MARR is an after-tax 12 percent. Determine which investment is less costly, based upon comparison of after-tax annual worth.
Step by Step Answer:
Principles Of Engineering Economic Analysis
ISBN: 9781118163832
6th Edition
Authors: John A. White, Kenneth E. Case, David B. Pratt