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Two types of machine tools are available for performing a particular job in a certain manufacturing firm. The estimated costs and salvage values are sum
Two types of machine tools are available for performing a particular job in a certain manufacturing firm. The estimated costs and salvage values are sum marized in the following table. Machine A Machine B First cost O&M costs/year Service life Salvage value Depreciation method $30,000 $3,000 6 years $6,000 MACRS (GDS) $40,000 $2,500 8 vears $4,000 MACRS (GDS) (Straight-line method) vears Recovery period 5 years The effective state and federal tax rate is 50%, and the capital-gains rate is 35%. Make your comparison after income taxes, using a MARR of 10% and in dicate the study period
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