Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Chapter 1O, Problem 027 (Video Solution) Your answer is partially correct. Try again. A portable concrete test instrument used in construction for evaluating and profiling

image text in transcribed

Chapter 1O, Problem 027 (Video Solution) Your answer is partially correct. Try again. 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 firm for $22,500. The instrument will be used for 6 years and be worth $2,500 at that time. The annual cost of use and maintenance will be $11,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $26,000, with use and maintenance costs of only $9,500 and salvage value after 6 years of $2,000. The m arginal tax rate is 40%, and MARA is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. lAlternative 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 xt is 3%. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table

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

Students also viewed these Accounting questions