Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are evaluating a potential investment in equipment. The equipment's basic price is $ 1 3 3 , 0 0 0 , and shipping costs

You are evaluating a potential investment in equipment. The equipment's basic price is $133,000, and shipping costs will be $4,000. It will cost another $20,000 to modify it for special use by your firm, and an additional $8,000 to install it. The equipment falls in the MACRS 3-year class that allows depreciation of 33% the first year, 45% the second year, 15% the third year, and 7% the fourth year. You expect to sell the equipment for 24,800 at the end of three years. The equipment is expected to generate revenues of $127,000 per year with annual operating costs of $58,000. The firm's marginal tax rate is 20.0%. What is the initial outlay for the project?
Group of answer choices
$140,200
$133,000
$145,000
$153,000
$165,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

An Introduction To Socio-Finance

Authors: Jørgen Vitting Andersen, Andrzej Nowak

2013th Edition

3642419437, 978-3642419430

More Books

Students also viewed these Finance questions

Question

2. Are my sources up to date?

Answered: 1 week ago