1. A large Company is planning to buy a new pump. The pump costs $54,000, and has a 10- year life and $4,000 salvage value after 10 years. The shipping and installation cost was $5,000. The pump will increase the company's revenue before taxes by $13,000 with an associated increased in maintenance expenses by $1,000 in each of the 10 years. The company's effective tax rate is 51%. What is the ROR on the pump? (a) Before-Tax and no depreciation of the pump. (b) After-Tax but, no depreciation of the pump. (c) After-Tax and value of the pump depreciate as a straight-line. (d) The company has an alternative pump that costs $100,000 and generates an annual increase in company's revenue by $24,000. The pump is also has a 10-year life and zero salvage value; however, a special provision in the tax laws permits depreciation (use straight-line) of this pump over a 5-year period. Which pump the company should buy? Calculate after-tax with depreciation and compare ROR with (c) above for buying decision. A company has purchased equipment whose first cost is $100,000 with an estimated lit of eight years. The estimated salvage value of the equipment at the end of its lifetime