Answered step by step
Verified Expert Solution
Question
1 Approved Answer
FAME Industries is a small business expanding its machining operations and plans to purchase 10CNC machines for a total of $1,400,000; this is considered MACRS
FAME Industries is a small business expanding its machining operations and plans to purchase 10CNC machines for a total of $1,400,000; this is considered MACRS 5-year property. The business estimates that these machines will generate an additional revenue of $275,000 per year; they plan to keep the machines for the next 8 years. At the end of 8 years, the CNC machines would have a salvage value of $155,000. The tax rate is 26%, the CNC machines are eligible for a Section 179 deduction, and FAME Industrie: uses an after-tax MARR of 10\%. Compute the PW and determine whether FAME Industries should invest in the CNC machines. 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 20. Should FAME Industries invest in the CNC machines? FAME Industries is a small business expanding its machining operations and plans to purchase 10CNC machines for a total of $1,400,000; this is considered MACRS 5-year property. The business estimates that these machines will generate an additional revenue of $275,000 per year; they plan to keep the machines for the next 8 years. At the end of 8 years, the CNC machines would have a salvage value of $155,000. The tax rate is 26%, the CNC machines are eligible for a Section 179 deduction, and FAME Industrie: uses an after-tax MARR of 10\%. Compute the PW and determine whether FAME Industries should invest in the CNC machines. 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 20. Should FAME Industries invest in the CNC machines
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started