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Elena's Caf is investing in a new commercial refrigeration unit that will cost $30,000. They estimate that the unit will produce annual revenues of
Elena's Caf is investing in a new commercial refrigeration unit that will cost $30,000. They estimate that the unit will produce annual revenues of $8,500 for each of the next 6 years. The refrigeration unit will have negligible salvage value at the end of the next 6 years. Assuming a tax rate of 27%, a MACRS 5-year property class, 50% bonus depreciation, and an after-tax MARR of 6%, compute the present worth of the refrigeration unit and determine whether or not Elena's Caf should invest in the refrigeration unit. Click here to access the TVM Factor Table calculator. Click here to access the MACRS-GDS Property Classes. Click here to access the MACRS-GDS percentages page. Click here to access the MACRS-GDS percentages for 27.5-year residential rental property. $ Carry all interim calculations to 5 decimal places and then round your final answer to a whole number. The tolerance is 8. Should Elena's Caf invest in the refrigeration unit?
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