Question
DigCo is considering the purchase of a backhoe (CCA class 8) for the pipeline contracting firm. The machine will cost $110,000, last six years with
DigCo is considering the purchase of a backhoe (CCA class 8) for the pipeline contracting firm. The machine will cost $110,000, last six years with a salvage value of $20,000, and reduce annual maintenance, insurance, and labour costs by $30,000 per year. The after tax MARR is 9% and DigCo's corporate tax rate is 55%
(a) What is the exact after tax IRR for this investment?
(b) Should DigCo buy the backhoe?
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Microeconomics
Authors: Paul Krugman, Robin Wells
5th edition
1319098780, 1319098789, 978-1319098780
