use hand calculation

After-Tax Replacement Study: Example Example Midcontinent Power Authority purchased emission control equipment 3 years ago for $600,000. Management has discovered that it is technologically and legally outdated now. New equipment has been identified. If a market value of $400,000 is offered as the trade-in for the current equipment, perform a replacement study using a before-tax MARR of 10% per year, and a 7% per year after-tax MARR Assume an effective tax rate of 34%. As a simplifying assumption, use classical straight line depreciation with S = Ofor both alternatives. Defender Challenger 400.000 Market value, $ First cost, Annual cost. S/year Recovery period, years - 100.000 8 (originally) -1,000,000 -15,000 5 After-Tax Replacement Study: Example Example Midcontinent Power Authority purchased emission control equipment 3 years ago for $600,000. Management has discovered that it is technologically and legally outdated now. New equipment has been identified. If a market value of $400,000 is offered as the trade-in for the current equipment, perform a replacement study using a before-tax MARR of 10% per year, and a 7% per year after-tax MARR Assume an effective tax rate of 34%. As a simplifying assumption, use classical straight line depreciation with S = Ofor both alternatives. Defender Challenger 400.000 Market value, $ First cost, Annual cost. S/year Recovery period, years - 100.000 8 (originally) -1,000,000 -15,000 5