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A firm is considering purchasing a machine that costs $54,000. It will be used for six years, and the salvage value at that time is
A firm is considering purchasing a machine that costs $54,000. It will be used for six years, and the salvage value at that time is expected to be zero. The machine will save $45,000 per year in labor, but it will incur $10,000 in operating and maintenance costs each year. The machine will be depreciated according to five-year MACRS. The firm's tax rate is 35%, and its after-tax MARR is 14%. Should the machine be purchased? Click the icon to view the MACRS depreciation schedules. Click the icon to view the interest factors for discrete compounding when i = 14% per year. The present worth of the project is $ (Round to the nearest dollar.) - X More Info N 1 Single Payment Compound Present Amount Worth Factor Factor (F/P, i, N) (P/F, i, N) 1.1400 0.8772 1.2996 0.7695 1.4815 0.6750 1.6890 0.5921 1.9254 0.5194 Compound Amount Factor (F/A, I, N) 1.0000 2.1400 3.4396 4.9211 6.6101 Equal Payment Series Sinking Present Fund Worth Factor Factor (A/F, i, N) (P/A, I, N) 1.0000 0.8772 0.4673 1.6467 0.2907 2.3216 0.2032 2.9137 0.1513 3.4331 Capital Recovery Factor (A/P, i, N) 1.1400 0.6073 0.4307 0.3432 0.2913 2 3 4 5 6 8.5355 3.8887 0.1172 0.0932 0.4556 0.3996 0.3506 0.2572 0.2332 7 4.2883 2.1950 2.5023 2.8526 3.2519 3.7072 8 0.0756 0.2156 10.7305 13.2328 16.0853 19.3373 9 0.3075 0.2697 0.0622 0.0517 4.6389 4.9464 5.2161 0.2022 0.1917 10 Print Done . X More Info - Year n Depreciation rate 200% 200% 200% 200% 150% 150% 1 2 3 33.33 44.45 14.81" 7.41 20.00 32.00 19.20 11.52 11.52 5.76 14.29 24.49 17.49 12.49 5.00 9.50 8.55 7.70 3.750 7.219 6.677 4 6.177 5 8.93 6 10.00 18.00 14.40 11.52 9.22 7.37 6.55 6.55 6.56 6.55 3.28 8.92 8.93 4.46 7 8 9 10 11 12 13 14 15 16 17 18 19 20 6.93 6.23 5.90 5.90 5.91 5.90 5.91 5.90 5.91 5.90 5.91 2.95 5.713 5.285 4.888 4.522 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 4.462 4.461 2.231 21 Year to switch from declining balance to straight line Print Done
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