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GridCo Analytics needs to purchase new land surveying equipment. GridCo's after tax MARR is 9% and the corporate tax rate is 42%. Surveying equipment
GridCo Analytics needs to purchase new land surveying equipment. GridCo's after tax MARR is 9% and the corporate tax rate is 42%. Surveying equipment is a CCA Class 8 asset. The remaining data are contained in the table below. Model Ranger Sonic_Flex Laser Metric First Cost Economic Life (Years) $110,000 5 $130,000 5 $155,000 5 Annual Net Salvage Value Savings $65,000 $20,000 $85,000 $25,000 $90,000 $30,000 (a) Using the annual worth method, which model should BlastCo buy? (5 marks) (b) What is the approximate after tax IRR of each model? (5 marks) (c) What is the exact after tax IRR of each model? (5 marks)
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