Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and

image text in transcribedimage text in transcribed

A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $80,000 with $2, 500 salvage value after 16 years. The other can be purchased and installed for $105,000 with $2, 500 salvage value after 16 years. Operation and maintenance for each is expected to be $17, 500 and $11, 500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 40%, and has a MARR of 9% after taxes. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Conveyor 1: $ Conveyor 2: $ What must the cost of the second (more expensive) conveyor be for there to be no economic advantage between the two? A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $80,000 with $2, 500 salvage value after 16 years. The other can be purchased and installed for $105,000 with $2, 500 salvage value after 16 years. Operation and maintenance for each is expected to be $17, 500 and $11, 500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 40%, and has a MARR of 9% after taxes. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Conveyor 1: $ Conveyor 2: $ What must the cost of the second (more expensive) conveyor be for there to be no economic advantage between the two

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

=+2. How do you think other models of persuasion (e.g., the

Answered: 1 week ago