7-42. A firm must decide between two silicon layer chip designs from Intel. Their effective income tax

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7-42. A firm must decide between two silicon layer chip designs from Intel. Their effective income tax rate is 20%, and MACRS depreciation is used. If the desired after-tax return on investment is 10% per year, which design should be chosen? State your assumptions. (7.10)

Design A Design B Capital investment $1,000,000 $2,000,000 MV at end of useful life $1,000,000 $1,100,000 Annual revenues less $200,000 $400,000 expenses MACRS property class 5 years 5 years Useful life 7 years 6 years

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Engineering Economy

ISBN: 9781292265001

17th Global Edition

Authors: William G. Sullivan ,Elin M. Wicks ,C. Patrick Koelling

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