Padre Pio owns a small busines and has taxable income of $150,000. He is considering four mutually exclusive alternative models of machinery. Which machine should be selected on an after-tax basis? The after-tax MARR is 15%. Assume that each machine is MACRS 5-year property and can be sold for a market value that is 25% of the purchase cost, and the project life is 10 years.

Im assuming the taxable income of $150,000 implies a tax rate of 39%.

Model	I	II	III	IV
First Cost	$9000	$8000	$7500	$6200
Annual Costs	25	200	300	600

The textbook answer is "C has lowest PW cost at $6801"

Please help because I have no idea how to get this answer.

Thanks