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In a chlorine-fluxing installation in a large aluminum company, engineers are considering the replacement of existing plastic pipe fittings with more expensive, but longer lived,
In a chlorine-fluxing installation in a large aluminum company, engineers are considering the replacement of existing plastic pipe fittings with more expensive, but longer lived, copper fittings. The following table gives a comparison of the capital investments, lives, salvage values, and so on of the two mutually exclusive alternatives under consideration: Plastic Copper Capital investment $5,000 $10,000 Useful (class) life 5 years Salvage value for depreciation purposes $1,000(=SV) $5,000(SV10) Annual expenses $300 $100 Market value at end of useful life SO SO 10 years Question 7 10 pts Depreciation amounts are calculated with the SL method. Assume an income tax rate of 40% and a MARR after taxes of 12% per year. What is after-taxes AW of Plastic? Question 8 10 pts What is after-taxes AW of Copper
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