Engineering economics

Mary Meek, the owner of a flower shop, is considering buying a new van for deliveries. She has estimated that the new van would result in a savings of $25,000 per year over the old van. The new van would cost $45,000 and will have a useful life of six years (MACRS 5-year recovery period) at which time t will be sold for $4,500. Mary uses a 15% after-tax MAR and the van would be depreciated using MACRS. Should Mary purchase the van on an after-tax basis? Mary uses a 40% tax rate. Determine the depreciation schedule for straight line, 150% declining balance, and MACRS depreciation methods. (10 points) a b. Using your MACRS depreciation values and the information above, determine if the van should be purchased on an after tax basis. (20 points) EOY Straight Line Depreciation150% DB Depreciation MACRS Depreciation 2 EOY CFBT TI CFAT ax 0