Calculating PWa using MACRS...

The Ford Motor Company is considering three mutually exclusive electronic stability control systems for protection against rollover of its automobiles. The investment period is four years (equal lives), and the MARR is 11% per year. Data for fixturing costs of the systems are given on the right. The alternatives all have a MACRS (GDS) property class of three years. If the effective income tax rate is 40% and the after tax MARR = (1 - 0.4)(11%) = 6.6% per year, which alternative should be recommended? Calculate the PW value for the alternative A. PW A(6.6%) =