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A company is considering the purchase of an industrial laser for $150,000.The device has a useful life of five years and a salvage (market) value
A company is considering the purchase of an industrial laser for $150,000.The device has a useful life of five years and a salvage (market) value of $30,000 at the end of those five years.The before-tax cash flow is estimated to be $45,000 per year.The laser would be depreciated using MACRS with a recovery period of three years.If the effective income tax is 25% and the after-tax MARR is 15%, use the PW method on an after-tax basis to determine the profitability of the laser and make a recommendation.
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