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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.
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 30%. Depreciation recapture is also taxed at 30 If the after-tax MARR is 8% per year, which of the two fixtures should be recommended? Assume repeatability. Fixture X Fixture Y $30,000 Capital investment $40,000 $3,000 $5,500 Annual operating expenses Useful life 6 years 8 years $8,000 $7,000 Market value Depreciation method SL to zero book value over 5 years MACRS (GDS) with 5-year recovery period E Click the icon to view the GDs Recovery Rates (rk) for the 5-year property class. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. Calculate the AW value for the Fixture X. AWx(8%) Round to the nearest dollar
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