A firm must decide between two designs. Their effective income tax rate is 33%, and MACRS depreciation is used. If the desired after-tax return on investment is 10% per year, which design should be chosen? More Info Design A $950,000 Design B $1,820,000 Capital investment MV at end of useful life $920,000 $1,010,000 Annual revenues less expenses $150,000 $360,000 5 years GDS Recovery Rates (rk) Year 5 years MACRS property class Useful life 7 years 6 years 5-year Property Class 0.2000 1 2 0.3200 Click the icon to view the GDS Recovery Rates (r) for the 5-year property class. 3 0.1920 FI L LI- __:___ - MADD-400/=.. 4 0.1152 C 5 0.1152 6 0.0576 Calculate the AW value for the Design A. AWA (10%) = $(Round to the nearest dollar.) Calculate the AW value for the Design B. AWB (10%) = $ (Round to the nearest dollar.) Based on the AW values, Design B should be chosen. Print Done A firm must decide between two designs. Their effective income tax rate is 33%, and MACRS depreciation is used. If the desired after-tax return on investment is 10% per year, which design should be chosen? More Info Design A $950,000 Design B $1,820,000 Capital investment MV at end of useful life $920,000 $1,010,000 Annual revenues less expenses $150,000 $360,000 5 years GDS Recovery Rates (rk) Year 5 years MACRS property class Useful life 7 years 6 years 5-year Property Class 0.2000 1 2 0.3200 Click the icon to view the GDS Recovery Rates (r) for the 5-year property class. 3 0.1920 FI L LI- __:___ - MADD-400/=.. 4 0.1152 C 5 0.1152 6 0.0576 Calculate the AW value for the Design A. AWA (10%) = $(Round to the nearest dollar.) Calculate the AW value for the Design B. AWB (10%) = $ (Round to the nearest dollar.) Based on the AW values, Design B should be chosen. Print Done