Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Homework: Homework 9 - Depreciation and After-Tax Analysis Score: 0 of 1 pt Problem 7-39 (algorithmic) Save 5 of 5 (3 complete) HW Score: 46.67%,
Homework: Homework 9 - Depreciation and After-Tax Analysis Score: 0 of 1 pt Problem 7-39 (algorithmic) Save 5 of 5 (3 complete) HW Score: 46.67%, 2.33 of 5 pts ; Show Work Question Help Two fixtures are being considered for a particular job in a manufacturing firm. The pertinent data for their comparison are summarized in the following table. The effective federal and state income tax rate is 15%. Depreciation recapture is also taxed at 15%. If the after-tax MARR is 12% per year, which of the two fixtures should be recommended? Assume repeatability. Capital investment Annual operating expenses Useful life Market value Depreciation method FixtureX $40,000 $2,000 6 years $8,000 Fixture Y $45,000 S5,500 8 years $7,000 SL to zero book value over 5 years MACRS (GDS) with 5-year recovery period Click the icon to view the GDS Recovery Rates (rx) for the 5-year property class Calculate the AW value for the Fixture X. AWx(12%)-3| | (Round to the nearest dollar.) Enter your answer in the answer box and then click Check Answer. Clear All Check Answer remaining
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