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Green Management Company is considering the acquisition of a new eighteen-wheeler. The truck's base price is S75,000, and it will cost another $22,000 to modify
Green Management Company is considering the acquisition of a new eighteen-wheeler. The truck's base price is S75,000, and it will cost another $22,000 to modify it for special use by the company This truck falls into the MACRS five-year class. It will be sold after three years for $28,000. The truck purchase will have no effect on revenues, but it is expected to save the firm $46,000ar in before-tax operating costs, mainly in leasing expenses The firm's marginal tax rate (federal plus state) is 35%, and its MARR is 12%. Click the icon to view the MACRS depreciation schedules. Click the icon to view the interest factors for discrete compounding when i: 12% per year. (a) Is this project acceptable, based on the most likely estimates given in the problem? The NPW of the project is $ 14,092. (Round to the nearest dollar.) Would you choose this project on the basis of the present-worth criterion? Choose the correct answer below. X No Yes (b) f the truck's base prfice is $85,00, hat would be the required savings in leasing so that the The required savings in leasing should be at least $ 41,641. (Round to the nearest dollar.) Green Management Company is considering the acquisition of a new eighteen-wheeler. The truck's base price is S75,000, and it will cost another $22,000 to modify it for special use by the company This truck falls into the MACRS five-year class. It will be sold after three years for $28,000. The truck purchase will have no effect on revenues, but it is expected to save the firm $46,000ar in before-tax operating costs, mainly in leasing expenses The firm's marginal tax rate (federal plus state) is 35%, and its MARR is 12%. Click the icon to view the MACRS depreciation schedules. Click the icon to view the interest factors for discrete compounding when i: 12% per year. (a) Is this project acceptable, based on the most likely estimates given in the problem? The NPW of the project is $ 14,092. (Round to the nearest dollar.) Would you choose this project on the basis of the present-worth criterion? Choose the correct answer below. X No Yes (b) f the truck's base prfice is $85,00, hat would be the required savings in leasing so that the The required savings in leasing should be at least $ 41,641. (Round to the nearest dollar.)
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