Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction form

image text in transcribed

A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction form for $21,000. The instrument will be used for 6 years and be worth $2,000 at that time. The annual cost of use and maintenance will be $11,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $29,000, with use and maintenance costs of only $6,000 and salvage value after 6 years of $4,500. The marginal tax rate is 25%, and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Alternative 2 Show the AW values used to make your decision: Alternative 1: $ Alternative 2: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10

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

Offshore Finance And State Power

Authors: Andrea Binder

1st Edition

0192870122, 978-0192870124

More Books

Students also viewed these Finance questions