Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $56,500.00, lasts 9
Two investments involving a virtual mold apparatus for producing dental crowns qualify for different property classes. Investment A has a cost of $56,500.00, lasts 9 years with no salvage value, and costs $150, 000 per year in operating expenses. It is in the 3-year property class. Investment B has a cost of $87,500.00, lasts 9 years with no salvage value, and costs $125,000 per year. Investment B, however, is in the 7-year property class. The company marginal tax rate is 40%, and MARR is an after-tax 10%. Based upon the use of MACRS-GDS depreciation, compare the AW of each alternative. Which should be selected? (Investment A; Investment B) What must be Investment B's cost of operating expenses for these two investments to be equivalent? $ Round your answer to 2 decimal places. The tolerance is +/- 10
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