A machine has a purchase cost of $10,000 End of year book values, salvage values, and annual O M costs are provided over its useful life as follows (a) Determine the economic life of the machine if the MARR is 15 and the marginal tax rate is 40 (b) Determine the economic life of the machine if the ...

B 5 576 and B 6 0 a Economic service life 6 years with MARR is 15 b Economic service life 5 years wi ...

A machine has a purchase cost of $10,000. End-of-year book values, salvage values, and annual O&M costs

Question:

A machine has a purchase cost of $10,000. End-of-year book values, salvage values, and annual O&M costs are provided over its useful life as follows: Year-End Book Value Salvage Value Operating Costs $8,000 $1,500 $5,300 $4,800 $2,100 $3,900 $2,700 $2,880 $2,800 $1,728

Year-End Book Value Salvage Value Operating Costs $8,000 $1,500 $5,300 $4,800 $2,100 $3,900 $2,700 $2,880 $2,800 $1,728

(a) Determine the economic life of the machine if the MARR is 15% and the marginal tax rate is 40%.
(b) Determine the economic life of the machine if the MARR is changed to 10% and the marginal tax rate remains at 40%.

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...

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