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I'm having trouble with this question, the answer for it is at the bottom but I am unable to get to it. Your company has
I'm having trouble with this question, the answer for it is at the bottom but I am unable to get to it.
Your company has just signed a three-year nonrenewable contract with the city of New Orleans for earthmoving work. You are investigating the purchase of heavy construction equipment for this job. The equipment costs $210,000 and qualifies for five-year MACRS depreciation. At the end of the three-year contract, you expect to be able to sell the equipment for $78,000. If the projected operating expense for the equipment is $70,000 per year, what is the after-tax equivalent uniform annual cost (EUAC) of owning and operating this equipment? The effective income tax rate is 35%, and the after-tax MARR is 15% per year. Click the icon to view the GDS Recovery Rates (r) for the 5-year property class Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15% per year. The after-tax equivalent uniform annual cost is $99,333 (Round to the nearest dollar.)Step by Step Solution
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