Thomas completed a study of a $1 million 3-yearold DNA analysis and modeling system that DynaScope Enterprises

Question:

Thomas completed a study of a $1 million 3-yearold DNA analysis and modeling system that DynaScope Enterprises wants to keep for 1 more year or dispose of now. His table (in $1000 units) details the analysis, including an anticipated $100,000 selling price (SP) at the end of next year, SL depreciation, taxes at the all inclusive rate of Te = 52%, and PW at the after-tax MARR of 5% per year. Thomas recommends retention since PW > 0. Critique the analysis to determine if he made the correct recommendation.

Year CFBT SP SL Depr. TI Taxes CFAT -1000 - 1000 1 275 250 25 13 262 2 275 250 25 13 262 3 275 250 25 13 262 4 275 100 250 25 13 362 PW at 5% 11.3

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...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Engineering Economy

ISBN: 978-0073523439

8th edition

Authors: Leland T. Blank, Anthony Tarquin

Question Posted: