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1) What is after-tax PW of alternative 1? 2) What is after-tax PW of alternative 2? A company with an effective income tax rate and
1) What is after-tax PW of alternative 1?
2) What is after-tax PW of alternative 2?
A company with an effective income tax rate and a capital gains tax of 40% and a MARR of 12% must choose between two mutually exclusive projects. Project 1 Project 2 33,000 Initial Cost 11,000 Uniform annual benefit 3,000 9,000 Depreciation method Straight Line MACRS 3 years 3 years Depreciable life IRS approved salvage value for depreciation purposes Useful life 2,000 5 years 5 years Actual market value at end of useful life 2,000 2,000Step by Step Solution
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