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A firm is considering investing 515,500 in equipment that is expected to have a useful life of four years and is expected to reduce (save)
A firm is considering investing 515,500 in equipment that is expected to have a useful life of four years and is expected to reduce (save) the firm's labor costs by $2,500 per year the equipment can be sold for $3,200 at the end of the penod. Assume the firm pays a 20% income tax rate on its taxable income and uses the declining balance (200%) depreciation method the firm's after lax MARR is 30% per year. 40 ptsa) What is the depreciation deduction amounts for years 1 through 4? 60 pts b) What are the after-tax cash flow amounts for years 1 through 4? Is this investment profitable or not? A film is coosidering investing $15,500 in equipment that is expected to have a useful life of four years and is expected to reduce (save the firm's labor costs by $2,500 per year. The equipment can be sold for $8,200 at the end of the period. Assume the tim pays, a 26% income tax rate on its taxable income and uses the decling balance (200%) depreciation method. The firm's after-tax MARR is 30% per year. 40 pts. a) What is the depreciation deduction amounts for years 1 through 4? 60 pts. b) What are the after-tax cash flow amounts for years 1 through 4? Is this investment profitable or not? (Ctrl)
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