Question
could anyone help me explain/breakdown this problem please. Problem #12-14: (Incremental tax rate for 10-15M income is 35%) Florida Construction Equipment Rentals (FCER) purchases a
could anyone help me explain/breakdown this problem please.
Problem #12-14: (Incremental tax rate for 10-15M income is 35%)
Florida Construction Equipment Rentals (FCER) purchases a new 10,000-pound-rated crane for rental to its customers. This crane costs $1,125,000 and is expected to last for 25 years, at which time it will have an expected salvage value of $147,000. FCER earns $195,000 before-tax cash flow each year in rental income from this crane, and its total taxable income each year is between $10M and $15M. If FCER uses straight-line depreciation and a MARR of 15%, what is the present worth of the after-tax cash flow for this equipment? Should the company invest in this crane?
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Managerial Accounting Tools for Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
4th Canadian edition
1118856996, 978-1118856994
